Cancelling your Business insurance? The consequences – Part 2

Carrying on from my previous blog, if you want to save money please think before you cancel your insurances, as there could be unforeseen consequences.

Firstly, there are several types of insurance which are arranged on a ‘claims made’ basis. This means that as soon as the policy ceases, all cover ceases COMPLETELY, so even if something happened a month ago, when you had insurance, if you cancel it now, no cover is deemed to ever have been in force! It can work both ways though, because if you’ve never had insurance & then buy it, all claims from that date onwards are valid irrespective of whenever ‘it’ happened. So be careful of cancelling these because once your policy is dead it cannot be brought back to life to deal with a claim, it will be completely dead, like a vampire with a stake through the heart. Examples of these type of insurances are Professional Indemnity, Cyber and Directors Liability insurance.

Then there are the contractual issues. If you’ve got a mortgage it will be a condition that you keep the asset (the property) insured. And if you breach your contract, the lender could (for example) demand you repay the mortgage in its entirety, immediately. The same applies to anything which you’ve purchased with a loan such as machinery for example, so be very careful about cancelling insurances linked to assets with loans or mortgages.

So, what can you cancel to save money?

Believe it or not, for most businesses Public Liability insurance is not compulsory, the exceptions being places like zoos & equestrian centres, but if you’re working and especially if you are visiting someone else’s premises (or if someone is visiting your premises) you would be insane not to hold Public Liability insurance as court costs are rising, and it won’t make a jot of difference if you are insured or not, you will still be sued if something goes wrong & personally, I’d rather have an insurance company picking up the bill than having to go home & tell my wife & kids to start packing because we’ve just lost our home.

Travel insurance would probably be a good one to cancel, but bear in mind that if you’ve made a claim, you probably won’t get a premium refund and one day (hopefully) we might be able to travel outside of our homes again, so don’t forget to reinstate it if you do kill it off, and all the signs are that it will be more expensive than before, simply because of the vast amounts of money travel insurers have had to pay out due to Covid-19 cancellations.

If you need to reduce your overheads and if you’re paying monthly, why not ask your insurer or your finance provider for a payment holiday, as most insurers would rather help you than see you cancel your policy.

Or you could just give us a ring? We’re really busy at the moment & have recently saved several clients 30% (or more) on their insurances simply by doing our job properly & getting the best price available. We deal with 70+ insurers which is a lot more than most brokers, and that is because we want to be able to offer you the best possible option rather than working with a small panel of insurers who pay us more money for doing so.

Take care out there & stay safe #HereToHelp

 

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