Many businesses across the world have suffered at the hands of COVID-19. It has been a rough start to the year, and things are not quite back to normality. Because of lockdown, social distancing guidelines, the lack of employees’ ability to work, and less overall consumption, many businesses are hurting. As a result, owners are looking for ways to cut back expenditures to survive. You may be considering getting rid of your business insurance or cutting back on it to save a few dollars every month to keep your company afloat. While this sounds plausible in theory, in reality, it exposes your business to financial risk.
Why to Keep Your Insurance
We strongly recommend not allowing insurance policies to cancel due to lack of funds or fear of needing money for other purposes. Instead of cancelling a policy or letting it lapse, call the insurance agency and ask for help. Many insurers understand that this is a difficult time for businesses, and they may be offering some form of relief in the form of reduced payments or postponed payments.
You will be surprised how agents are willing to assist their customers during this time. If your business is struggling financially, it is best to let your insurer know as soon as possible so that they have more time to develop the right strategy to help you.
Premiums Would Increase
If you chose to cancel coverage while your business is temporarily closed or offering fewer services, be prepared for higher commercial insurance premiums when you come to take out insurance again. When you are back on your feet and ready for fuller coverage, the insurer will look at your previous insurance profile when deciding your premiums. If they see that you had a lapse in coverage – even just for a couple of months – then they will view you as high-risk, and increase premiums to compensate the risk. Going without insurance is a sure way to land more expensive premiums, even if you opt for the same coverage as before.
Update Your Policies
If you are looking for ways to shave some dollars off your premium per month, take some time now to review them. If employees have recently left the company to care for loved ones or you have been forced to let staff go, update your workers’ compensation coverage. Ask your insurer if you can switch to a pay-as-you-go reporting policy if your company’s payroll has dropped. If you have switched to remote-only working, update your commercial property insurance. There are many ways you can look to save money by simply aligning coverage with your needs.
Don’t Leave Your Business Exposed
Canceling your business insurance is a sure way to expose your company to risk. For example, temporarily having no property insurance could land you in hot water if your rented office is broken into and valuable equipment is stolen. Even getting rid of commercial auto insurance while you are not driving the company car is a mistake to make. The car could get vandalized, stolen, or damaged in a disaster that you are then forced to pay for repairs out of pocket.
Keeping your insurance protects your business and pocket from costly incidents that could happen – pandemic or not.
ABOUT RMS HOSPITALITY GROUP
At RMS Hospitality Group, our expertly crafted policies are written specifically for the hospitality industry. We offer custom-tailored solutions to meet any venue’s specific needs. For more information, contact our knowledgeable experts today at (888) 359-8390.