If the COVID- 19 pandemic has severely impacted your business, you may consider cancelling your business insurance to cope with the expenses. However, business insurance provides you with a lot of benefits, whether your business is open or closed.
Cancelling your business insurance may seem to be a cost-effective option, but you need to understand the risks before moving ahead.
Risks of Cancelling Business Insurance
By cancelling your business insurance, you expose yourself to certain risks, which include:
You will have some losses when you cancel your business insurance. First, you will have to pay higher premiums for getting new coverage, as you have discontinued your previous policy. This makes you a high-risk prospect for every insurer. You won’t get a full refund of your premium, and you may have to pay an additional premium because of a ‘minimum earned premium’ clause written into policies.
Withdrawal of Licenses
You must have specific insurance to retain your business licenses. Cancelling your business insurance means you may lose your licenses as well. Getting them back can be difficult, expensive, and time-consuming.
Theft and Vandalism
Your store is at risk of being vandalized – even if it is temporarily closed due to the pandemic. If you discontinue commercial property insurance, you will have to cover the expenses of theft and vandalism should the worst happen.
Risk of Default
If you are a business owner with financial obligations like an equipment loan or a mortgage, it is mandatory to have insurance to be eligible for a loan or lease. You will be considered a defaulter if you discontinue your business insurance, and your lease could be terminated.
Consider these benefits before you decide to cancel your business insurance. Having commercial insurance is the way to protect your business during this pandemic. If you have additional questions, contact the experts at Udell Family Insurance today. We are ready to assist you with all your coverage needs.