The temporary shutdown of non-essential businesses has left many owners unsure of the future. It’s only natural to cut some of the costs of your business until you’re able to get back to work. It might seem logical to cancel one of your insurance policies, such as your general liability insurance. There’s no chance of a customer or employee slipping and falling if they can’t be in the building, right? While that statement is correct, that doesn’t mean you should touch your insurance policies during this time. Canceling now to save money will end up costing you a lot more when you’re able to open back up and get those policies reinstated. Here are a few reasons your insurance should be one of the last things you cut.
● It’ll Cost More: Your insurance company won’t let you pause any of your policies. You’ll have to cancel them altogether and get new ones when you’re able to reopen. You’ll end up paying a much higher premium because the insurance company will consider your business risky. They’ll see that you’ve changed your policies so soon after canceling one and that there hasn’t been an income for the past few months.
● Business Licenses & Permits Will Be Lost: Businesses need general liability, workers’ compensation insurance, and more to have various licenses and permits. Without that insurance, you risk getting both revoked. You’ll have to reapply for them instead of just starting the business back up as soon as you’re able to.
● Damaged & Stolen Property Will Be Out Of Pocket: Unfortunately, your business and many others are vulnerable to theft and vandalism. If your business is broken into and you’ve canceled your commercial property insurance, you as the owner will have to pay for the damages and replacements instead of the insurance company.
● Paying for Car Accidents: If you’re lucky enough to be able to provide deliveries, the odds of a car accident happening have increased. Whether your employee has caused the accident or was the victim in one, without the proper insurance, you might be forced to cover medical bills, property damage, workers’ comp., legal costs, and more.
●Defaulting on Loans or Leases: Have you taken out a loan to fund your business or a mortgage for the building? If you temporarily drop your insurance coverage, you could default on both. This means you could go into foreclosure, have equipment repossessed, and more.
Unless you’re planning on closing your business permanently, do not cancel your insurance to save some money. If you have any questions, don’t hesitate to contact us to discuss what options you have!