During COVID-19, your business may have been on lockdown, forcing you to shut the doors and instruct your employees to work from home. This still may very well be the case, and you may be looking at a couple more months of doing so. The pandemic has hit a lot of businesses hard, especially smaller ones. Because of this, you may be tempted to save money by cancelling your business insurance policies.
Here’s what you should know before cancelling commercial insurance coverage.
You won’t get a full refund. If you do choose to cancel your commercial policies, know that you won’t get a refund for all the premiums. Many insurance providers include “minimum earned premium” clauses in policies, which means that you’ll still have to pay a percentage of the total premium if you cancel coverage.
You’ll end up paying more for new coverage. Even if you want to cancel property insurance cause your business is locked or general liability because there’s no chance of a customer visiting you and getting injured, think twice before doing so. If you cancel coverage then get a new policy once you’re back open, you will have a lapse in coverage. Insurers see this as a big red flag. If you have gaps in insurance, it’s likely you’ll have higher insurance premiums on the new policies.
You could lose business licenses and permits. Many commercial licenses and permits rely on you to have insurance coverage before being issued. If you cancel insurance coverage, you risk losing your permits to operate, too.
Before you cancel commercial coverage, consider the consequences. The team at Reata Insurance Group are here to help you navigate your way to a reliable insurance policy. Located in Lakeway, we help Texan business owners. Contact us today for more information.