Paying for Commercial Crime Insurance in Texas
Most Texas businesses pay for commercial crime insurance as part of the overall commercial coverage policy for protection against business crimes. The insurer bills for the whole policy as a lump sum and the business can decide to either pay the whole amount or to use premium financing to break the total sum into more manageable payment options. Premium finance options in Texas commercial insurance are always more expensive than paying for coverage in full.
Who Pays for Commercial Crime Insurance?
The business is the named insured on the commercial crime policy. Ultimately, the business as an entity is responsible for paying for the coverage it needs to sustain business operations. In reality, a business manager, or even the business owner themself are legally responsible for paying for the actual coverage, using the business bank account.
What are the Payment Options for Commercial Crime Insurance?
In Texas, payment for commercial crime insurance (or business crime insurance) is done either monthly or annually, this can be by:
Check
Auto debit (ACH) - for premium finance
Money order
Credit cards
Payments in cash are usually not allowed. With different options available for making payments, the best option is the one that is easy and convenient for both parties.
Can I Finance the Cost of Commercial Crime Insurance?
Yes, you can finance commercial crime insurance using third-party premium financing companies to provide loans to individuals and companies that need to finance insurance. Premium financing applies to commercial crime insurance, life insurance, and property insurance plans.
To know the finance options available to you, contact a Texas-licensed commercial insurance agent who will explain how you can finance your commercial crime insurance plan and will give you several to choose from.
Is Premium Financing Available for Commercial Crime Insurance?
Yes, a premium financing option is available for commercial crime insurance in Texas.
How Does Premium Financing Work in Commercial Crime Insurance?
The premium financing method of paying for commercial crime insurance is a third-party payment model that involves a financing company paying an insured’s premiums while the insured pays back in installments. It is a flexible and low-risk method of financing a business crime insurance plan. The policy owner agrees with the financing company with the help of an insurance agent. The insured pays for coverage using a loan from the financing company, in most cases, a bank.
The premium financing method of paying for commercial crime insurance increases the cost of coverage by 7% to 10% of the initial cost. The increase in the cost of commercial crime insurance results from:
Interest paid for the loan
Penalty (that may result from a breach of any of the terms of the contract)
Administrative fees for processing the monthly payments to the insurance company
With premium financing, the insureds are assured of coverage all year, they are only concerned about the timely loan repayment. This loan comes with an annual interest rate and the insured can pay it back in installments. To be eligible for premium financing, the applying business needs to pay a downpayment (usually equal to up to around 2 months of coverage 2/12th of the total)
If your business is considering premium financing for commercial insurance coverage, ask your insurance agent for recommendations. Then compare the terms between the given options to choose the one best for the protection of your business assets.
How is Premium Finance Different from Other Payment Methods for Commercial Crime Insurance?
With premium financing, the insured business is not directly involved in the premium payment to the insurer. The financing company handles the payment in full to the insurer from their account and the business then pays the loan back with the interest that comes with it. The extra interest (with an average of 8% - 10%) means extra costs for the business. If the business can afford to pay the annual premium in full - it can save by not having to pay the interest.
How Often is Commercial Crime Insurance Paid?
How often you make premium payments for your commercial crime insurance in Texas depends on the agreement you have with the insurance company. In most cases, premium financing for commercial crime insurance is paid in 11 payments:
1 downpayment of around 2 months of premium (no interest applied)
10 monthly payments (which include the loan interest):
Is Commercial Crime Insurance Paid Monthly or Yearly?
Although an annual option is the default method of quoting and buying commercial crime in Texas, you can make a monthly premium payment for an extra fee.
Can Commercial Crime Insurance Premiums be Paid Annually?
Yes, annual payment of commercial crime insurance premiums in Texas is possible. If you pay in full - you are paying the lowest cost.
Can New Commercial Crime Insurance Cover Old Bills?
No, a new commercial crime insurance policy cannot cover old bills incurred under a previous policy. Each policy must settle its bill. Do not expect your old bills from a plan to be added to a new plan. Moreover, a new commercial crime insurance policy can be from a new insurer, and there is no way the new insurance company will pay bills that were not incurred under their watch.
If you have active overlapping coverage from two different policies for the same insurable event, one policy will act as the primary plan while the other becomes the secondary plan. The secondary plan only pays for the benefits that the primary plan does not pay for. Speak to a Texas-licensed commercial insurance professional to explain to you how overlapping coverage works for normal business operations.
How Do I Send my Commercial Crime Insurance Bill?
Commercial crime premium is paid either directly to the insurer (if made in full) or every month to the premium financing company. It may be paid independently or as additional insurance, as part of a larger commercial policy. The most common way to pay commercial insurance in Texas is via a paper business check through the mail. Paper checks tend to be easier to track through the banking system, which helps with accounting. When you start the coverage, you usually give the check to your insurance agent, who in turn passes it on to the Insurer (if paid in full), or to the premium financing company (if it's a loan down payment).
If paid in full, expect to hear from your agent and the insurer with the new annual bill in about 10 months. If you’ve paid just the downpayment for crime coverage, the premium finance company will either send you a monthly bill or will issue your business a coupon book, which can be used to attach to the monthly mailed in payments.
Do I Pay Taxes on Commercial Crime Insurance?
No, there is no sales tax that a business must pay on business insurance in Texas. You do not pay tax when you purchase insurance, the insurer pays a sales tax to the state on any policy it sells, but this cost is not passed on to the insured business.
Is Commercial Crime Insurance Premium Tax Deductible?
In Texas, a commercial crime insurance premium may be tax-deductible. A commercial. Insurance is considered a business expense, therefore, it can qualify for tax deductions. Contact a licensed tax professional to check if your commercial crime insurance is tax-deductible.
Can You Pay Commercial Crime Insurance Late?
It is not advisable to pay late for your commercial crime insurance. Late payments may lead to unplanned expenses in fines. Late payments can also lead to plan cancellation which ultimately ends in a lapse in coverage. While the insurer may have a grace period of 10 to 30 days on the annual payment, after which the coverage may be canceled, if the business chose premium financing, the loan will remain outstanding until it gets paid, adding a late payment fee to the total every time it's late by 10 days or more.
Does Commercial Crime Insurance Have a Grace Period?
Yes, commercial crime insurance has a grace period. Like most insurance plans, it must be specified in the policy contract. Any outstanding premium must be paid before this period elapses; failure to do this may lead to a coverage lapse. After coverage lapses, a policy owner risks loss if an insured event happens. In Texas, the grace period for an insurance plan varies but usually runs between 10 and 30 days.
What is a Grace Period in Commercial Crime Insurance?
A grace period in commercial crime insurance is the period given by the insurance company to the insured business to pay a premium after its due date. The insurer notifies the business if it is running late with a payment. If no payment is made on the due date, the grace period will be activated. Failure to pay the premium within this period may lead to a lapse in coverage (the business loses insurance coverage).
In Texas, the grace period for commercial crime insurance is usually 30 days. However, this may vary depending on the terms in the policy declaration document. The grace period for premium finance companies in TX is usually 10 days, after which the insured business owes extra “late” fees.
Is There a Grace Period for Commercial Crime Insurance after Termination?
No, there is no grace period after termination. To terminate a business insurance policy before the expiration date, the insurance company would have exhausted all means of getting the policy owner to pay the premium. If the insured business fails to pay a premium when due, the insurer notifies the insured before activating a grace period as stated in the policy declaration document. Before terminating the policy after the grace period expires, the insurer allows the policy owner an extra ten days of grace to pay up.
What to Do if you Can’t Pay for Commercial Crime Insurance
If the business does not have the money to pay for commercial crime insurance, it will not be able to get coverage. Contact a knowledgeable Texas-licensed commercial insurance agent to help you weigh your cost options by:
Reassessing your commercial crime insurance needs and verifying the coverage limits
Cross-checking alternative coverage options with multiple insurers
Restructuring your commercial crime coverage as part of a bundle of multiple coverages, can cut the overall expenses, and
Seeking premium financing, so the costs of commercial crime insurance can be spread over multiple payments.
Alternatively, a business can reduce the cost of commercial crime insurance by opting for a fidelity bond, which is usually less expensive. Unlike commercial crime insurance, which offers general protection for business operations, a fidelity bond provides coverage for fraudulent acts by specific individuals, for instance, employees. Due to its affordability and flexibility in coverage, a fidelity bond may be a good option for small business owners seeking coverage for their business operations.
Will my Commercial Crime Insurance Lapse if I Miss a Payment?
If you default on your premium payment, your commercial crime insurance coverage does not automatically lapse. The insurance company will notify you when you miss a payment. If you do not make payment within the notice period, the grace period will set in. A lapse in coverage only comes into effect after the expiration of the grace period.
Speak with a Texas-licensed insurance agent to get more information on commercial crime insurance, how it works, and the benefits that come with it.
