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Want to Cancel Insurance for Your IT Company? Things to Consider

Business Insurance – Factors To Consider When Contemplating Cancellation

Small businesses must be covered under some type of insurance policy. Fortunately, the options are nearly endless for these businesses. If your business has only been in operation a few months in Canada, the odds of it being covered in a basic insurance policy are high. The reason the odds are high is that Canada insurance regulations require small business owners to obtain and carry business insurance. What exactly is business insurance? Is business insurance a necessity and/or legal requirement? Should I keep my business insurance policy if it is not a legal requirement? Find the answers to these questions and much more in the article below.

 

Business Insurance Policy – Dos And Don’ts

Since small businesses operating within the Canadian borders are required to be insured, there is always a chance the owner may want to make alterations at some point. This is a very common practice among small business owners. As the company grows and expands, a basic IT business insurance policy will soon become insufficient. This time will come unexpectedly whether you want it to or not. There may even become a point when you feel your insurance policy is no longer needed. 

Once you and your business reach this point, you will need to decide if your existing insurance policy should go or stay. Unfortunately, way too many small business owners to do away with their insurance policies for one reason or another. If this sounds like something you intend to do, you need to be aware of the potential consequences. First and foremost, it is crucial to know these consequences prior to canceling your policy because it may be that you regret your decision later on down the road.

 

Higher Premiums The Next Time Around

Many insurance companies classify uninsured consumers as high-risk. If you decide to sign up for business insurance after canceling your previous policy, you will also be classified as a high-risk customer. Regardless of how long you paid on your existing policy, the mere fact that you opted to cancel, you are high-risk because you are uninsured. 

All uninsured business insurance applicants are penalized when they sign up for business insurance, resulting in higher monthly premiums. In the long run, you could have possibly saved some money by continuing your existing policy.

 

Lapse In Coverage

 A lapse in coverage is pretty much the same thing as being uninsured. Insurance companies focus a lot of attention on the length of time applicants are uninsured. This definitely applies to applicants who canceled previous policies and decided to get new policies. A lapse in coverage begins the same minute you cancel your policy and ends when you are approved for a new policy. 

The longer you are uninsured, the higher your monthly premiums may be when you sign up for a new policy. It is best to avoid a lapse in coverage if at all possible. The only way to do this is to have continuous business insurance coverage.

 

Errors And Omissions (E&O) – A ‘Claims-Made’ Insurance Policy

E&O Insurance is mostly classified as a “claims-made” policy because it does not cover third-party claims after the coverage has been canceled. What most consumers are not aware of is E&O coverage stops the second you cancel your policy. Even if the policy has several months of coverage left on it, claims filed following cancellation are not covered.

 

Early Cancellation Penalties

Some insurance companies penalize their customers because they canceled their policies before the expiration date. The monetary penalty will vary from one insurance company to another. The only way to avoid this penalty is to continue paying your premiums right up to the expiration date.

 

ProfessionalsCoverage Helps Canadians Avoid ‘High-Risk’ Classification

ProfessionalsCoverage is a business insurance expert in Canada. The firm will help you avoid unnecessary penalties associated with the high-risk classification. These professionals will also help you customize a business policy that is guaranteed to meet or exceed your insurance needs.

 

 

 

 

 

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Helpful resources for IT professionals and their companies

 

Other types of IT Businesses we insure:

If your specializing is not mentioned below, have no worries. Our insurance markets can provide liability coverage for the majority of information technology related businesses.