The pandemic has shattered many businesses, forcing some to close their doors for good. For others, they have had enough funds or income to get through the last few months. If you’re one of these business owners, you will probably be looking for ways to cut expenses.
Why you could pay a higher price for insurance coverage if you cancel it now.
Cancelling one or more of your insurance policies while your business is closed may seem like a smart financial decision. You’re not using your business’s office, so why do you need commercial property, right? There’s no chance of someone slipping and falling now while your business is closed, so why pay for general liability insurance?
Well, before you cancel your insurance coverage, you should know the consequences of doing so. Cancelling insurance can cause more problems than it will fix. It will also cost more in the long-run than the short-term savings you see now.
You will end up paying more for a new policy. Insurance carriers don’t tend to let you pause or temporarily suspend policies. If you cancel your insurance, you will have to purchase new coverage when your business opens. This means you may have a gap—even if it’s a small number of days or months—in coverage. For insurers, a gap between policies is a big red flag. As a result, they may charge you more when taking out a new policy because you had a lapse in coverage.
You could lose business licenses or permits. Certain industries, such as construction, require special permits. Your state or city may also require you to have a business license. Generally, businesses must have a minimum amount of coverage in hand before a license or permit is issued. Get rid of that coverage and your permit/license could be revoked.
If you are struggling to pay your insurance premiums, talk to your insurer. They will know how to help you through this time. Serving Mifflintown, Millersburg, and surrounding towns in Pennsylvania, the professionals at Sausman Insurance Agency can help you acquire reliable business insurance.