How can the coronavirus pandemic affect your business insurance?
The Coronavirus Pandemic and Your Business Insurance
If the coronavirus pandemic has affected your business, you may want to review your business insurance.
This COVID-19 pandemic has caused many businesses to suspend or alter their operations.
If you have had to do any of the following for the coronavirus pandemic, you may want to review your business insurance.
- Layoff employees
- Suspend operations of your business (i.e. offering delivery of products or food)
- Change the way you do business
- Change the products that you are providing or manufacturing
Any of these changes may impact your business insurance.
Cancelling you business insurance may not be your best option
If you are unable to do business during this time, you may be thinking about cancelling your business insurance until the coronavirus pandemic passes.
Before making that decision, do these two things first:
- Contact your insurance agent to see if there are any adjustments that can be made to your policy to lower the insurance costs during these slow times. (Details later in this blog)
- Call your insurance company to see if they can suspend your insurance payments for a period of time. The Maryland Insurance Administration has made a plea with the insurance companies to make accommodations to those that are affected by the pandemic.
Cancelling your business insurance now can make it more expensive for you when you want to buy it again. Over the years you have earned renewal discounts, experience modifications, and underwriter credits if you have had few claims and paid your bills on time. These are not available to new businesses or clients with a lapse in coverage. This is why you should avoid cancelling your insurance at all cost.
Normally, the cost of getting the new policy will be more than continuing your current policy. Don’t let a short term interruption in business to affect your insurance costs for the next three to five years.
We hope that this coronavirus runs its course as quickly as possible so we can all get back to normal business.
We know that being shut down or having layoffs for even a month can affect your business.
Most liability insurance policies are based on revenue or payroll and all workers compensation policies are based on payroll.
Unfortunately, it is too soon to know exactly when we will get back to work. But, if you have projections on how the shutdown will affect your payroll or sales, then please give us a call. We may be able to adjust your policy now. Rather, than waiting for an audit at the end of the policy term.
Remember, that your policy year is usually not the calendar year, so here is what to do:
- Review your policy for the effective date and the current payroll or receipts that the coverage is based on
- Determine how much payroll/sales you have had since the inception date till now
- Project out your estimated payroll/sales from now till the end of the policy term taking in consideration the approximate of time that you will be closed or downsized (keep in mind some businesses are expecting up to a 50% increase in business once they do reopen)
- Contact Huff Insurance to make the appropriate changes to your policy now
Keep in mind, if your operations have changed, for example your restaurant is now doing delivery that was not offered before. Or you are making widgets know that you did not make in the past, then please contact us immediately. There may be different classifications or coverages that need to be added to yur policy temporarily to give you the coverage you need for the added exposure.
Are you a restaurant that has had to start food delivery?
If you are a restaurant that has had to start offering food delivery by your employees, we have good news for you. Most of our companies are adding the Non-Owned auto endorsement to their policies. This covers you if your driver causes an accident and you get brought into a lawsuit.
We even had a couple that did NOT charge an additional premium as long as the delivery stops when the state of emergency is over and things get back to normal. You did not read that wrong, some insurance companies are offering an additional coverage for FREE to help you through these tough times.
Also, please visit https://www.huffinsurance.com/blog/important-coronavirus-links-and-resources/ for a list of government links and resources to help you get through this time.
Huff insurance wants your business to continue and wants to help work with you to make the necessary changes to your coverage now to help you through this trying time.
Please reach out to us if you have ANY questions on how this pandemic will affect your business insurance.
*Please note that policy eligibility and policy coverage vary by company and by state. Please contact your insurance company or insurance agent to see how your situation will affect your specific insurance policy.
Here are other resources that we have put together for the coronavirus pandemic: