Before you cancel your existing small business insurance policy, it is important to know the repercussions of your actions. This warning goes out mainly to business owners who either have pending claims or still have outstanding liability. Outstanding liability could be something as large as a job that is still in progress, or as small as a company still using a piece of software you developed 20 years ago.

Letting your policy lapse is essentially the same as canceling. Any work that was done under the coverage of your prior policy will not be covered by your new policy if you let it lapse. Many small business owners are caught in unfortunate positions because they let their policies lapse. Don’t let this easy to avoid mistakes happen to you.

Even if you have been operating a small business for 30 years, there are still insurance nuances that can take us all by surprise. It is important to stay educated about the insurance laws that change on a near-daily basis – or you can discuss any questions with your business insurance agent.