Canceling Business Interruption Insurance in Texas
In Texas, an active business interruption insurance policy can be canceled at any time. However, the insurer might charge a cancellation fee. Before trying to cancel a policy, the representatives of a business should speak to a Texas-licensed commercial insurance agent for advice regarding the cancellation process. It is always advisable to use an agent because an agent can:
Assess existing business interruption needs
Weigh the implication of canceling an existing business interruptions insurance
Suggest other possible coverage for the business while ensuring there is no gap in the business interruption coverage
How Do I Cancel Business Interruption Insurance Policy?
An existing business interruption insurance can be canceled by using the services of a Texas-licensed commercial insurance agent. The process of cancellation in Texas is as follows:
Conduct an appraisal of the business interruption needs and determine if the policy can be canceled without any adverse effect on the business
If no adverse effect is determined, the policy owner(s) should inform the insurer of their intention to cancel the policy
Sign all paperwork relevant to the cancellation of the policy as the insurer requires
Receive a refund of unused premiums
The insurer may charge a cancellation fee if applicable
Is it Bad to Cancel Business Interruption Insurance Policy?
Canceling an active business interruption insurance policy in Texas can be detrimental to a business. For example, if there is a financier, canceling the policy can constitute a breach of contract if the financier requires insurance coverage. Moreso, in the event of a covered peril, it may be challenging to keep up with profit or income sharing agreements if a business is without an active business interruption insurance.
On the flip side, it might be good to cancel a business interruption insurance policy if the policy premiums become too expensive and the business can no longer bear the costs without running into a loss. But, again, it is best to consult with a Texas-licensed insurance agent for the possibility of finding a more affordable insurance policy.
Can I Cancel Business Interruption Insurance without Penalty?
If a business cancels an existing BI insurance plan the insurance company will charge a penalty fee except clearly stipulated in the BI insurance policy document. The best way to find out is to speak to a licensed commercial insurance agent or the assigned contact person at the insurance company.
Do I Get a Refund of Unused Premiums if I Cancel Business Interruption Insurance Coverage?
If business interruption premiums have been paid in advance, an insurance provider in Texas is obliged to refund unused premiums if a business chooses to cancel its policy. The insurer subtracts any fees that are owed to them and sends you the check for the remaining sum. The check is made out to the name of the insured business.
How Can I Reinstate Canceled Business Interruption Insurance?
Reinstating a business interruption insurance in Texas requires contacting the insurance provider and entering into a new policy agreement. After signing the contracts, payments towards the insurance premiums should be initiated immediately to ensure the policy does not lapse going forward. Contact a Texas-licensed commercial insurance agent to assist in reinstating a business interruption insurance policy.
