Closing your business? Consider this...

It is common for our organization to receive a request from a business client to cancel their policies because they are retiring, selling or closing their business.

Before you close everything down, please consider the following:

1. Do not cancel coverage based on an estimated future date, no matter how confident you are that it will happen.  For Property Insurance, make sure that the closing occurs, and that you have no insurable interest in any buildings or business personal property of value.
2. If you will be issuing payroll checks to employees after the physical premises are closed, then Workers Compensation and other mandatory coverages may still need to be in place for a while longer.
3. Consider purchasing a Discontinued Products/Discontinued Operations Liability policy* to protect yourself from incidents that could occur in the future as a result of products you sold, or services you provided before your business was closed.
4. Consider purchasing an Extended Reporting Period endorsement on any in force Claims Made coverages such as Directors & Officers Liability, Cyber/Privacy Liability, and Employment Practices Liability.

The coverages described in 3 & 4 protect owner, Partners, Members, Officers or Shareholders from attempts by plaintiffs to pierce the “corporate shield of protection” and attach liens or claims against your private assets after you thought you were free and clear. While the likelihood of success on such late claims may be small, the cost of defense to respond to any allegations could be substantial. Ask your attorney to recommend the appropriate time for coverage to remain in place based on the Statue of Repose, and Statue of Limitations that may apply where you reside.

_{* Source: Discontinued Products and Operations Coverage (thebalancesmb.com)}