Product liability insurance is there to protect businesses from claims arising from a faulty product which causes injury or damage to third parties or their property. So if you cancel your insurance and a new claim is reported arising from a product that you have sold in the past, you will be liable to pay the claim, as your insurance no longer exists to cover you.
Insurers may be unlikely to pick up on previously supplied products if there has been a break in cover by the insured party.
Professional indemnity insurance
Similar to PL, Professional Indemnity (PI) insurance could be required as part of the contract with your client. It covers you against claims for professional negligence or inadequate advice that you may have given or actions that you have taken that have led to a financial loss for your client or customer.
PI insurance is written on a claims-made basis so if a claim comes in after you have cancelled the policy, there isn’t any insurance in place to protect you as the business owner. Typically, PI policies only cover activities which have taken place after a certain date, known as a retroactive date. If you cancel your insurance policy, it is at the discretion of your new insurer when you start trading again, as to whether or not they will cover your work from your previous retroactive date.
If your insurance picks up on the gap in cover from cancellation, they could add a premium onto your new policy when you start trading again.
Commercial vehicle cover
If you have a commercial vehicle but no work, you might be tempted to cancel your business insurance. However, if you rely on your commercial vehicle when you are outside of work, you will need to have insurance in place to be able to drive on the roads.
A minimum of third party insurance is a legal requirement for all road vehicles, so cancelling your commercial vehicle insurance could be disastrous for you and your business. Don’t forget, your van could get stolen too!
Commercial legal expenses
Many employment disputes can be covered under a commercial legal expenses policy, and at a time when your business could be on a reduced income or whilst closed, there may be an increase in employment or contract disputes. Many policies also provide access to a legal helpline or document template library which could be an invaluable tool.
Directors & Officers insurance
The insurance industry is expecting an increase in Directors and Officers (D&O) insurance claims as businesses may be facing claims arising from decisions that have been made that haven’t accounted for pandemics.
It is important to keep D&O insurance cover in place to ensure that all decisions you make for businesses continue to be covered.
Business travel insurance
If your employees need to travel regularly as part of their roles, your business may have taken out business travel insurance. The outbreak has meant that a number of business trips are likely to have been cancelled as governments around the world have implemented travel restrictions, limiting the places that people can go or leave.
You may need business travel insurance to reimburse any trips that are being cancelled, and if there any members of staff that are trapped where they have visited. It is important to not cancel your insurance until they have arrived home safely, as your travel insurance can repatriate you for many costs, including medical bills that may have been incurred because of COVID-19.
It is important to understand the guidance and advice being given by the Foreign & Commonwealth Office before travelling abroad. It is just as important to adhere to the advice being provided by the government in relation to travel within the UK too so as not to jeopardise your cover.
Personal accident cover
As with most personal accident insurance covers, it is important not to cancel this type of insurance for the simple fact that if you cancel, you will not be covered for a personal injury that you may experience at a later date.
Personal accident insurance can give you peace of mind that you and your business can be covered in the event that you suffer a life-changing accident.