An insured business in Texas can cancel its business liability insurance. However, the insurer may impose a cancellation fee or penalty. Business owners are advised to consult with Texas-licensed commercial insurance agents before canceling their insurance policies. Your agent will:
Examine a business’s insurance needs
Help the business owner understand how cancellation may affect their business
Offer alternative coverage choices where there is a need to cancel a business liability insurance policy
To cancel a business liability insurance policy in Texas, the owner of an insured business or representatives should contact their commercial insurance agent and inform them of such intention. A licensed insurance agent would take the following steps to cancel a business liability policy:
Evaluate business insurance needs and determine if a business still needs its current insurance policy
If they determine the current coverage is no longer adequate, they will contact the insurer and inform them about the business owner’s intention to discontinue the policy
Fill out the required paperwork and follow up with the cancellation process
A business may be left without insurance coverage if it terminates its business liability insurance policy. Also, many insurers in Texas take cancellation fees, so canceling a plan may result in a penalty. If a business no longer needs liability coverage or cannot afford it and wishes to switch to a more affordable policy, canceling the current plan may be a smart move.
In Texas, it is likely that a business insurance provider will penalize an insured business for canceling its insurance policy early. If a business wants to avoid any penalties for canceling its business liability insurance policy, it should do so on the policy’s expiry or renewal date.
If an insured business pays its business liability insurance premium upfront, the insurer will refund unused portions of the premium in the event of the policy cancellation. If premium financing was used, the insurer refunds the overage to the premium financier, who takes out any owed fees and sends the remaining sum (if anything is left) as refund to the no-longer-insured business.
A business owner in Texas can take the following steps to reinstate a canceled business liability insurance policy:
Contact their business liability insurer through a licensed commercial insurance agent
Sign a new business liability insurance policy agreement to reinstate the canceled insurance policy
Ensure consistent payment of premiums soon after signing the agreement to avoid another policy lapse
If you have further questions about commercial liability insurance, speak with a licensed and knowledgeable commercial insurance agent.