AIG Hit With Decorative Firm’s Suit Over M&A Misrepresentation

A decorative surface provider is suing an American International Group Inc. unit, seeking insurance coverage for a misrepresentation allegedly made by a vinyl coated fabrics business in an M&A deal finalized in 2023.

AIG Specialty Insurance Co. is obligated to indemnify Surteco North America Inc. for losses stemming from the acquisition target’s rosy statements about a top customer, Surteco said in a complaint filed Oct. 17 in the Delaware Superior Court.

The use of insurance for losses resulting from breaches of sellers’ representations and warranties in M&A deals has become commonplace for corporate transactions, though claims disputes rarely escalate to ...