Every answer and its explanation appears here once you have finished the path. Each one then links to the matching glossary entry, where the concept is set out in full with its worked example.
1. Under an English-law policy, why does cover not degrade gradually on a sale, but stop at a precise hour?
Because at completion the seller ceases to have an insurable interest in the asset sold, its cover becoming purposeless, while the buyer has no contract at all: that hour is the one everyone spends celebrating the signature
The governing principle is rarely stated: a policy does not travel with the property it covers, it binds an insurer to a named insured on a described interest. The seller could no longer claim a loss it would not suffer, and the buyer was never a party to the contract. French law says the opposite for property insurance: article L. 121-10 of the Insurance Code keeps cover running automatically for the buyer unless either party cancels, which is why the question sets an English-law policy, the commonest form in the political risk market. The answer awaiting cancellation by the insurer assumes an act is needed, when nothing is canceled: the subject of the cover disappears. The one extending to the annual expiry confuses the contract's term with the existence of the interest, and it is the commonest belief among buyers, who compute their exposure from an expiry date.
Glossary entry →2. Two operations look alike in every way and produce opposite results. What separates them, and which clause can reopen the question in the favorable case?
The name on the cover page: if the policy is taken out by the local company, selling its shares does not change the insured, which stays covered; if it is taken out by the parent, selling the subsidiary leaves the policy with a seller that has nothing left to insure. And even in the first case, a change of control clause often provides for automatic termination or prior consent
The reason for the change of control clause is the same as the reason cover does not transfer, and it is legitimate: the underwriter wrote a shareholder as much as an asset, it assessed that group's governance, its local partner, its handling of past claims. A buyer that checked the policy was in the local company's name and thought itself safe then discovers that the policy was set to expire on the day it arrived. The answer invoking the price paid describes an economic consequence and not the mechanism. The one calling the two regimes identical erases the very distinction this module exists to draw.
Glossary entry →3. The sale agreement provides that the seller will give reasonable cooperation in transferring the policies. What is that clause worth at claim time?
It recovers nothing: it is a best-efforts obligation on a transfer that did not take place, it does not bind the insurer, which is not a party to it, and it creates no cover
A clause between seller and buyer cannot create an insurance contract, and that is what the buyer discovers at the worst moment. A claim against the seller exists and it is not automatic: it will have to be shown that the transfer would have been obtained had the seller acted differently, a hard thing to prove since the insurer could refuse. The answer making the policy enforceable through the sale agreement applies to a third party a contract it is not party to. What had to be written fits in one line and was negotiable while the insurer still had an account to keep: the insurer's written consent as a CONDITION PRECEDENT to completion, not as an undertaking to try.
Glossary entry →4. A triggering event occurs before completion and is only notified afterward. Whose claim is it?
In principle to whoever suffered the loss, that is the seller, unless the price already reflected that loss, in which case the buyer will argue it belongs to it: this split is settled in three lines of the sale agreement and is almost never there
This question is often worth more than the future cover, and both negotiating camps believe the other has handled it, which is exactly why it never is. The answer giving it to the buyer follows the notification date, which says nothing about who bore the loss. The one splitting pro rata to the holding period invents an attractive rule with no basis, the loss not being continuous but arising on a given day. The remedy is a written split distinguishing claims already notified from those that are not.
Glossary entry →5. Why can the transfer question not be recovered after completion?
Because the balance of power flips the second the price is paid: before, the insurer has an account to keep and can accept a novation; after, it has nothing to keep, the buyer is an ordinary prospect, and it will offer a new policy at the going rate on a country that may have deteriorated
The gap between the two situations lies in a balance of power, not in the law, and that is what makes the calendar decisive: the insurance question belongs at the letter of intent stage, alongside the regulatory approvals, and not in the list of ancillary conditions. The answer invoking legal extinction describes the effect correctly and mistakes the cause of the deadlock, since an insurer that wants to can perfectly well issue a new policy: what it will no longer do is issue it on the old terms. The one barring retroactive cover names a real rule unrelated to the gap, which bears on the future as much as on the past.
Glossary entry →