Chapter 4: Risk Management for Contractors and Small Construction Businesses
Part 4: Why Starting and Stopping Insurance Coverage Never Pays Off
When you're a one-person operation, money is always a delicate balancing act between investing in your business and supporting yourself and your family. And it stands to reason that you'd look for fat to trim if it means staying on budget. While you may be tempted to terminate your mainstay policies to free up some finances, you should be aware that the couple bucks you'll save in the short term could lead to devastating long term consequences.
Whenever you cancel a policy, such as your General Liability Insurance, you leave your business utterly exposed. Even if you have plans to reinstate your coverage later, your business is open to liability suits in the interim. If money was already tight, chances are you wouldn't have the funds to pay out of pocket if your contracting business is sued over work you completed months before you ended your coverage.
By now you know that insurance coverage is an investment in your business's future. So don't risk losing all that you've worked for. After all, you never know when the work you've completed may hurt someone, and each state has its own laws for the amount of time an injured party has to sue. To learn your state's statutes of limitations, check out Nolo.com's "Statutes of Limitations in All 50 States."
Next: Conclusions and References
Download eBook [PDF]