Am I being taken advantage of? Liability Insurance Concerns After Business Sale
Here’s the situation: I recently sold my business through a share sale, and I’m no longer involved with its manufacturing side. My insurance provider insists that our policy remains unchanged until it expires in May 2025, even though we stopped operations back in September 2024.
I understand we need to maintain certain aspects of our insurance, but full coverage seems excessive, right? It feels a bit like a scam. We’re paying $14,000 a year for this policy since many of our clients were based in the U.S., and they have a reputation for litigation. I’m starting to question the insurance company’s motives; it seems they’re just interested in retaining us for the entire term of the policy.
I would greatly appreciate any advice on this issue! Thank you!
It sounds like you’re in a complex situation, and your concerns are valid. Here are some points to consider:
Understand Your Policy: Review your insurance policy in detail. Some policies have clauses that require you to maintain coverage for a certain period, even after ceasing operations. Look for any stipulations regarding business sales or changes in operation.
Consult with an Insurance Broker: It may be helpful to speak with an independent insurance broker who can provide an objective assessment of your situation. They can help determine if your current coverage is appropriate for your new business status.
Contact a Lawyer: Given that you’ve sold your business and are no longer operating, you may want to consult with a business attorney to ensure you’re not exposed to any liabilities. They can help you understand any potential risks you might still face and whether it makes sense to maintain full coverage.
Consider Your Liability Risk: If you’re still liable for any actions or events that occurred while you were operating, it may be necessary to keep some level of coverage. However, this doesn’t necessarily mean you need the full policy you had while operating the business.
Negotiate with Your Insurance Company: If you feel that the coverage is excessive given your current situation, reach out to your insurance company to discuss your options. Sometimes they may offer reduced coverage for a lower premium.
Research Other Options: If you feel strongly that your current insurance company is not acting in your best interest, it might be worth exploring other providers or policies that could better suit your needs now that you’re not actively manufacturing.
Ultimately, it’s crucial to get professional advice tailored to your specific situation. Remember, it’s better to be informed and protected than to take unnecessary risks.