It is time to move on. Maybe you are ready to retire. Maybe it is time that you look into other business ventures. Ending or closing your business means that you likely have a lot to do and a lot of things to wrap up.
However, ending your business insurance coverage shouldn’t be the first thing you do when you close your business.
Even after your business no longer operates, there are still risks. In many cases, damages can occur to a party involved with your business long after you have closed up shop. If an incident occurs that involves past services, then you could face a lawsuit.
These lawsuits can be very costly. This can be especially true if you no longer have the business assets to combat them. If you don’t have proper insurance, you may face costs that could easily ruin your finances.
When closing your business, you should consider insurance coverage commonly called discontinued operations coverage. This special coverage helps to cover you in case someone brings a lawsuit against you.
Discontinued operations coverage commonly covers both discontinued items and discontinued businesses.
Let’s say that you operate a business that installs swimming pools. You’ve installed a swimming pool as one of your last contracts before retirement. You shutter the business and are off to enjoy retirement.
But sometime later, the swimming pool’s foundations collapse. The collapse destroys the pool and causes other property damages. The pool’s owner could sue your business for negligent practices and replacement costs.
You might be in a tough pickle if you can’t afford to battle this lawsuit. You may lose personal assets because you don't have insurance coverage to protect you.
Therefore, discontinued operations coverage can help. This insurance will cover past operations or events that face challenges after your business no longer exists.
However, most states have statutes of limitations. These laws define how long after project that a person can sue you for damages. Suppose a roof you installed collapses after 20 years. The owners probably won’t be able to sue you. This is because there were probably many mitigating factors that contributed to the collapse.
Therefore, you probably won’t have to carry discontinued operations coverage forever. Talk to your insurance agency. You can determine how long you need to carry this coverage, and how much you need.
If you have questions about this type of coverage, call the Henrich Insurance Group today at (713) 349-0400. You can also go to our website to learn more about the business coverage you need.