Subject: Am I Being Scammed? Liability Insurance After Business Sale
Hi everyone,
I need some advice regarding my recent experience with liability insurance after selling my business. I recently conducted a share sale and no longer manage the manufacturing aspect. However, my insurance provider insists that the policy should remain unchanged until its expiration in May 2025, even though we stopped operations in September 2024.
I understand that we should retain some coverage, but maintaining full coverage seems excessive. Is this a scam? It feels quite unreasonable. We’re currently paying $14,000 a year for insurance, primarily because our customer base includes many Americans who tend to file lawsuits. Given that the insurance company appears motivated to keep us on the full policy, I’m feeling quite skeptical about their intentions.
Any insights or advice would be greatly appreciated! Thank you!
It sounds like you’re in a complicated situation, and it’s understandable to feel concerned about whether you’re being scammed. Here are a few points to consider:
Policy Terms: Review the terms of your liability insurance policy thoroughly. Many policies have specific clauses about coverage during operational changes, including sale or cessation of business activities. It’s important to know your rights and obligations under the policy.
Consult with an Expert: It might be worthwhile to consult with an insurance broker or legal expert who specializes in business insurance or liability law. They can provide clarity on your specific situation and help you understand if the insurance company is acting within their rights.
Coverage Needs: While you may no longer be operating, consider whether any potential liabilities from past operations could still arise, especially if there are ongoing claims or exposure to previous customers. Some components of the insurance might still be necessary to protect you from these risks.
Negotiate with Insurer: If you feel strongly that you do not need full coverage, reach out to your insurance company to discuss your concerns. It could be that they can provide adjustments or even alternatives that better align with your current situation.
Document Everything: Keep a detailed record of all communications with the insurance company and any advice you receive. This may prove valuable if you need to escalate the situation.
Shop Around: If the current insurer is not accommodating, consider getting quotes from other insurance providers. This might give you leverage in negotiations or provide you with a better option.
In summary, while it may seem like you’re being overcharged for unnecessary coverage, it’s important to gather more information before making any decisions. While you might still have some ongoing liability, your situation warrants a careful review of your policy. Good luck, and take care!