ABC and Pending Insurance Claims: An Overlooked Asset

When a business makes an assignment, any pending insurance claims — property damage, business interruption, liability — become assets of the estate. The assignee must identify and pursue these claims as diligently as any other asset.

Insurance Claims as Estate Assets

Business insurance claims in progress at the time of assignment include: property damage claims for recent incidents, business interruption claims, and liability claims where the business is the insured. The assignee steps into the business’s shoes as the claimant and pursues these recoveries for the benefit of creditors.

D&O insurance may protect the business owner personally. If the business carried directors and officers liability insurance, that coverage may respond to claims against the owner arising from the business’s management decisions. The assignee should identify any D&O policy early — both to ensure the coverage is maintained and to understand how it interacts with claims against the owner personally.

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