Which endorsement automatically extends coverage to a newly acquired organization for a defined period?

• A. Newly Acquired Organizations
• B. Additional Insured
• C. Waiver of Subrogation
• D. Primary & Noncontributory

Answer: (A)

This question hinges on how coverage can be extended automatically when a business acquires another company. The Newly Acquired Organizations endorsement is specifically designed for that purpose: it automatically extends the policy’s liability protections to a newly purchased organization for a defined period, often a set number of days (such as 30, 60, or 90), so there’s no gap in coverage while the acquisition is being arranged and the insurer is notified. After that defined period, coverage for the new entity typically ends unless you report the acquisition and obtain a formal extension or endorsement to include the new organization on the policy. This feature is particularly useful because it avoids an immediate lapse in protection during a transaction.

Other endorsements serve different purposes. An Additional Insured endorsement adds insured status to another party under the policy; a Waiver of Subrogation prevents the insurer from pursuing recovery from a party after a loss; Primary & Noncontributory specifies how the insured’s coverage interacts with other insurers. None of these automatically extend coverage to a newly acquired organization.