If you had to shut down your business due to COVID- 19, you might have considered cancelling your business insurance
to cut costs. However, this might put you at a higher financial risk as opposed to paying the existing premium.
Here are 5 reasons why you shouldn't cancel insurance
for your business:
1. You Will Not Get a Full Refund
A business insurance cancellation
before the policy expires does not mean that you will get a full refund. In fact, several insurance policies will have a "minimum earned premium" included by your provider. This would mean that even if you cancel the insurance, you will end up paying a part of the premium.
2. You May End Up Paying More for New Coverage
In the event of cancelling your business insurance
, your provider will not let you restart the policy at a later date. You will have to purchase a new plan. Moreover, a gap in your insurance is likely to cost you a higher premium on your new coverage.
3. You May Lose Your Business License and Permits
Many state-issued licenses and permits to run a business are subject to existing business insurance. Getting these back will be more expensive and time-consuming, so it's not wise to cancel your business insurance
4. You May Have to Cover Costs in Case of a Theft
A closed storefront is more likely to be a target for burglaries and thefts. If you cancel your commercial property insurance during the shutdown and your store suffers damages due to a burglary or vandalism, you will have to cover the costs yourself.
5. You Can Default on Your Loan Repayments
Your mortgage and equipment loans might require for you to have business insurance. So, without insurance, even if you make your payments, you can still default, leaving you without a place of business or essential resources.
Instead of cancelling your business insurance
, contact your insurance provider to readjust your premium and policies citing lower revenues. Experts from Fuller Insurance Agency
in Southern California will be able to help you with all your insurance needs and questions.