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What Happens if My Overland Park Business Insurance Gets Canceled?

The bills are piling up on your desk, cash flow is tight, and you just don’t know how you’re going to pay your business insurance premiums this month. So maybe you’ll let it lapse, and reinstate it once a few invoices get paid. No big deal… right?

Letting your insurance lapse is a bad idea for Overland Park business owners. There are lots of financial consequences, some hypothetical, and others very real. In this installment of Five Questions to Ask the Agent, let’s go over the problems that come with letting your policy lapse.

1. What fees will I have to pay if my insurance lapses?
The fee involved in getting your insurance back is called a reinstatement fee. Your insurance company might waive this fee if it’s the first time, but only sometimes.

2. Will my rate go up when I reinstate my business insurance?
For the most part, yes, your rate will increase once you get your policy back. This is because the cancellation counts negatively towards your overall risk profile, making you less attractive to the insurance company.

3. What other consequences do I face for a lapse in business insurance?
If your car insurance policy lapses, you will likely have to pay a small slap-on-the-wrist penalty, but you’re otherwise good to go so long as you don’t have any accidents. This isn’t true in the case of general or professional liability insurance. Say you do some work while your policy is canceled, and several years later, you get sued for this work. Your insurance company won’t pay out on a claim—leaving you with no financial protection.  

4. Are there any incentives to keeping continuous coverage?
Most business insurance plans come with a nice continuous coverage discount. If your insurance lapses for more than 30 days, you will lose this discount—and that means you’ll end up paying for that “break” in premium costs later.

5. What if I only work seasonally or need insurance for a special occasion?
Whether you are an Overland Park caterer or a Lee's Summit restaurant owner who needs special event insurance for a single occasion, or a Kansas City retailer who runs a Halloween store, you may only need insurance during certain times. Ask your agent about niche coverage that doesn’t have to be carried continuously. This is a much more organized way of tackling the issue than stopping and going with a regular policy.

Need business insurance in Overland Park, Kansas? Contact Conrad Insurance Agency for a free quote today.