Many businesses, both small and large, have been hit hard by COVID-19. As such, many business owners are looking for ways how to save money. You may be tempted to cancel some of your commercial insurance policies to save money until your business is entirely back up and running. However, there are some important things to note before you do.
What to Consider Before Canceling Commercial Insurance
You won’t get a refund. Most insurance policies have a clause that states they will not give the policyholder a refund if they cancel their coverage early. In fact, you may end up having to pay a portion of the remaining premium – which means you’ll end up saving little to no money.
Your business is still exposed to risks. Even if your business hasn’t reopened yet, it still faces daily risks. From thieves to a burst water pipe to cyber risks from employees working from home, there are many hazards your business continually faces. If you cancel coverage, you will lose that financial protection, meaning if the worst does happen, your business will be out of pocket for the repairs and damages.
Your premiums could be higher. If you cancel coverage for a certain number of weeks and then look to take out insurance when your business is back up and running, you will have a gap in coverage. Insurers will view this as a red flag, often hiking up the premiums to compensate for the added risk. As a result, your premiums may be higher than what they were, resulting in no cash savings.
The right business insurance policy should address your risks while staying in line with your budget. At J. Archer Insurance Group, our experts help you find the best coverage for your needs. Serving Houston, Texas and beyond, contact us today.