Canceling business insurance might seem like a good option to cut down your expenses, especially during difficult times like the COVID-19 pandemic. However, it can cost you more in the long run.
Here’s what you need to know before canceling your business insurance:
Losing Liability Insurance
Every business requires liability coverage to cover the costs of property damage claims against your business and medical expenses if someone gets injured at your company. If you cancel your business insurance, you aren’t protected from the risks involved in your daily work, and you have to be responsible for such payouts and expenses.
Loan or Lease Default
Even if you are current with loan repayments, business insurance cancellation may lead to loan defaulting, as most lenders require you to carry insurance. Frequent loan defaults may lead to foreclosure, leaving you without a place of business.
Exposed to Theft or Vandalism
Even when a business is fully up and running, it is exposed to high risks of theft and vandalism. If your store or office is closed, the risks of theft or vandalism can be further increased. If you cancel your business insurance, you won’t be covered for any such losses and may need to spend for the repairs and damages, which can make things even worse.
If you cancel your insurance, your customers may question your credibility and may discontinue their tie-up with you. This is because enterprises functioning without insurance are considered risky. If you cannot pay for the insurance, it is good to talk to your provider and ask if you are eligible for a reduced premium or adjusting your coverage options.
These are some of the reasons why business insurance cancellation isn’t the right choice. Do you have additional questions about your business insurance? Contact the experts at Scavone Insurance Agency Center LLC in White Plains, New York today. We look forward to helping you with all your insurance needs.