With restaurants and retail stores across the country either closed or open only for delivery or curbside service due to COVID-19, business owners are looking at ways to save money by cutting expenses. While canceling unneeded services like cable, streaming music, or linen service might save money now, it's important to not cancel other critical expenses like business insurance. In today's Aegis blog post, we look at some of the harm that can come from canceling business insurance for your restaurant or retail business during a closure.
Exposes Business To Property Damage and Liabilities
Thousands of businesses have closed or greatly reduced their operating hours, making many of these companies a prime target for thieves and vandals. Criminals are taking advantage by specifically looking to break into empty or understaffed businesses. Also, injuries and accidents can still occur on business property, even if it's closed or operating on reduced hours. For these reasons, it's vital that business owners still maintain all their commercial insurance coverage to protect against theft, property damage, injuries, losses, or liability claims that occur during a closure.
Lead To Loss of Licenses and Permits
In order to operate a retail store or restaurant, state and local government agencies generally require businesses to carry certain types of business insurance in order to receive necessary permits and operating licenses. When a business cancels their coverage, whether it's General Liability, Commercial Property, or Workers Compensation coverage, the company could lose their licenses and permits and face a long road of reapplication once their business reopens.
Result In Higher Premiums Later
Some business owners might decide it's worth it to save money by canceling business insurance coverage due to a closure, but these savings would be short-lived in the long run. When a business is able to reopen, they would need coverage again, but would likely end up paying much higher premiums than before. Higher premiums and deductibles would likely eat up any possible savings earned by canceling coverage during a forced closure.
The COVID-19 pandemic has left business owners scrambling to make wise financial decisions in the face of these uncertain economic times. While this is uncharted territory for all business owners, it shouldn't be a time to make panicked or hasty decisions that could jeopardize the future of a business. Aegis Insurance & Financial Services is committed to helping company owners make the best possible decisions by helping companies assess current insurance needs and financial goals. Contact our office at 713-850-7622 today for more information!