Am I being scammed? Concerns about Liability Insurance after Selling My Business
To summarize: I recently sold my business through a share sale and have stepped away from the manufacturing side of things. My insurance provider has informed me that the policy remains unchanged until it expires in May 2025, despite us ceasing operations in September 2024.
I understand that we need to maintain certain aspects of the insurance, but keeping full coverage seems excessive. Am I being taken advantage of here? This just seems unreasonable.
We’re paying $14,000 per year for insurance, primarily because a lot of our customers were American and they tend to be litigious. However, I’m hesitant to fully trust the insurance company, as they clearly have a vested interest in keeping us under the existing policy.
Any insight or advice would be greatly appreciated! Thank you!
It sounds like you’re in a tricky situation, and it’s understandable to be concerned about whether you’re being taken advantage of. Here are a few points to consider:
Understand Your Coverage Needs: Since you’ve ceased operations in the manufacturing component of your business, you may not need full coverage anymore. However, it’s essential to assess if you still require any liability coverage for any remaining operations or risks associated with the sale.
Insurance Policy Terms: Review your policy to understand what’s covered and whether you have any obligations or conditions regarding cancellation or modification. Some policies may require notifying the insurer about significant changes in operations.
Get a Second Opinion: If you’re unsure about your current insurance company’s stance, it might be beneficial to consult with another insurance agent or broker. They can help you evaluate your needs and might provide a clearer perspective on whether you should maintain full coverage.
Communicate Clearly: Reach out to your insurance company and express your concerns regarding the ongoing need for full coverage. Sometimes, direct communication can lead to a better understanding of available options or adjustments to your policy.
Consider Legal Advice: Depending on the situation, consulting with a legal professional about the obligations from the sale and any potential liabilities might be worthwhile. They can provide guidance on whether you are potentially overpaying for unnecessary coverage.
Cancellation or Adjustment Process: If you decide you do want to modify or cancel your coverage, inquire about the process and any potential penalties or implications.
It’s crucial to remain informed and proactive. Being vigilant about your insurance needs can help you avoid unnecessary expenses. Good luck!