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Upon the agreement to purchase a small business insurance policy or policies for your business, you should be presented with a “binder” signed by the insurance agent. This binder shows you as the insured party, the effective date of small business insurance coverage, limits of liability, and other related information. A binder is commonly valid for up to 90 days pending actual issuance of the policy.
When you receive your policy, request that your insurance agent deliver the policy or policies in person, at which time he or she can review everything with you, and answer any questions you might have.
Also important to note – an insurance company has a 60-day underwriting period, a time period in which they review the insurance application and other information submitted, potentially have a site inspection done, and verify the rating and premium calculation. The insurance company is allowed to cancel your small business insurance within that 60-day period. If this is the case, the company must provide you at least 10 days’ notice of the policy cancellation. The reasons for a policy cancellation are very limited. Most often they are due to nonpayment of premium or insurance fraud.
Additionally, a small business insurance company must provide the insured at least 60 days, but not more than 120 days notice of non-renewal, as well as the reasons why they are not renewing.
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