What happens when a new finance company is acquired under an ISO Commercial Crime policy?

When a new finance company is acquired under an ISO Commercial Crime policy, the correct understanding is that coverage applies for a limited time, but the policyholder is required to notify the insurer for continuation. This provision is designed to offer initial protection to the newly acquired entity while also allowing the insurance company the opportunity to assess the risk associated with the new acquisition.

This temporary coverage is important as it provides the policyholder with a safety net during the transition period following an acquisition. While the specific duration can vary, it often allows for seamless protection, typically ranging from 30 to 90 days after the acquisition, during which the insurer can be notified if the policyholder wishes to continue coverage for the new entity. This mechanism helps maintain coverage continuity and ensures that the acquiring company can adequately manage potential risks without an immediate financial burden.

In contrast to the other options, which suggest immediate cessation of coverage, no coverage extension, or a premium increase without conditions, the correct answer reflects the structured approach of extending coverage temporarily while requiring notification for its continuation, thus ensuring the interests of both the insurer and the insured are balanced during such transitions.