If you are a business owner, insurance cancellation may seem like an easy way out during the current fiscal crisis. But surprisingly, this may prove to be costly in the long run.
Here are some implications if you cancel your business insurance coverage for the time being:
Not Getting a Full Refund
Insurance carriers do not allow skipping insurance payments mid-way. If you are looking to restart your commercial insurance once the crisis has passed, the fine print on your policy won’t let you. If you go ahead and suspend your monthly premiums despite the terms and conditions, your insurance agency is not liable to pay you back the full amount of the policy.
Paying Additional Costs
Insurance is a business that runs on cash liquidity and the continuous flow of payments. Therefore, canceling business insurance payments may force you to pay fines or premiums calculated at high-interest rates.
Losing Your Business License
In some instances, the government mandates that enterprises own business insurance. Failure to pay for your commercial insurance coverage may lead to the cancellation of your existing business license and permits.
Moreover, recovering the license is an expensive, time-consuming, and challenging process that will incur several penalties. If you don’t want to put your business or employees at risk, you might want to hold on to your insurance for the time being.
Increasing Your Vulnerability
Businesses are always in danger of market risks, theft, and vandalism. You may face property damage or liability chances even during the slowdown. Stopping your insurance payments will expose you to these risks. Without the right insurance coverage in place, you might end up paying out-of-pocket for any repair costs and lost or stolen resources.
Whether you are a large business or a start-up, business insurance cancellation is not the best way to cut costs. If you would like some insurance guidance during these troubled times, contact the experts at Scautub Agency in Scotia, New York. Our dedicated team is happy to help with all your insurance needs.