How to Switch Business Insurance Plans Without a Hassle

If you're considering changing your business insurance coverage, make sure you don't leave yourself unprotected against liability and loss.

When It's Time to Change Your Business Insurance Carrier

You're concerned. The premiums for your business insurance plan continue to increase, seemingly without cause. Maybe you've had an unfortunate experience with your insurance company when you've tried to pursue a claim settlement. Or, your business requirements have dramatically changed through growth or recession. You're considering a change, but make sure to use your good business sense and look before you leap.

Perform an internal cost-benefit analysis when gathering insurance quotes for commercial insurance. Not all insurance companies are alike.

Once you're certain you can do better, take the following prudent steps:

1. Contact your current insurance company and establish a date to close the account and end coverage. Formal cancellation, in writing, is necessary if you don't want policy disputes hanging over your transition to a new plan. Verbal agreements and handshakes won't hold up in legal matters.
2. Sign on and establish terms of coverage, premiums, and a start date with your new insurance company. It can be a juggling act to start new coverage at the same time your old plan expires. In the short run, it may serve you to have a month of overlapping coverage with both companies while you transition to the new plan. You don't want to be vulnerable if there's a month or more where you're operating without a net.

Timing Your Business Insurance Transitions

Depending on your existing policy, you may incur penalties for terminating your coverage prior to the expiration date. And they can be costly. If you can possibly wait, the most economical hand-off between insurance companies is typically at renewal time with your present insurer.

Of course, you don't always have this convenient option. If you must change sooner and can afford the penalty, then at least make sure you're leaping on to steady ground. When seeking business insurance quotes, consider:

• If your premium is lower, is the coverage the same?
• Have your business needs changed? Do you have more (or fewer) employees who need workers compensation or liability coverage?
• Has your inventory changed significantly?
• Have you recently moved or are you planning to move to larger (or smaller) offices or warehouse space?
• Are there more (or fewer) drivers and vehicles in your business fleet?
• Have you added a greater number of electronic devices, machinery, or refrigeration equipment?

In short, are you scaling up or paring back? Your new insurance should be tailored to your new needs.

Your New Business Insurance Policy

Finally, before making a change, ask for quotes that match the same business requirements against the levels of coverage to find the right plan for your needs. Are you seeking liability insurance to protect your business against suits for negligence? Do you have enough property insurance to cover losses from fire, flood, or other natural disasters? Does your casualty plan cover any anticipated events?
Have you considered business interruption insurance that covers losses in business income in the event of closures by natural disasters or supply-chain interruptions? Do you need life or disability insurance coverage for employees or co-owners?
Changing insurance companies can be tricky, but the opportunity may come at just the right time to evaluate your existing plan and add new protections or trim away excessive coverage.

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