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A lapse in insurance can harm a small business

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Having small business insurance is important for start-ups and small enterprises, which is why SMB owners should work as hard as they can to avoid a lapse in coverage, reported Small Business Trends.

An insurance lapse can be caused by a business failing to pay its bill, not meeting the requirements of the carrier or having a large audit bill, which can all result in trouble for a business, wrote Ryan Hanley, an insurance professional and contributor to SBT.

Hanley said many businesses want to avoid an insurance lapse because a lapse of 30 days could result in the loss of a Continuous Coverage discount, which many providers give to their policyholders for holding onto their coverage.

Another problem that a lapse in coverage can cause is for a business to lose goodwill with insurance underwriters, which can be especially harmful because commercial insurance policies are typically written on a case-by-base basis, noted Hanley.  

Underwriting shrewdly from a commercial perspective is of increased importance after many catastrophes that occurred in the past year, reported Insurance & Technology. The website said a number of insurance professionals recently joined together at the 2012 Property/Casualty Insurance Joint Industry Forum to discuss changes in underwriting commercial insurance policies, paying added attention to the impact of high-frequency, low-severity weather events and not just catastrophic disasters.

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