WHAT TO KNOW ABOUT CANCELLING YOUR GENERAL LIABILITY POLICY

Your General Liability policy covers bodily injury and property damage while the work is being done and after the job is finished as long as you have continuous coverage. If you move to a different Insurance Company at renewal make sure they don’t put a “prior work” exclusion on the policy. It is necessary to have continuous coverage, so that completed operations claims will be covered, as long as they are covered by the Insurance Company that is on your Company when the loss occurs. Likewise if you go out of business and cancel your policy, you will not have coverage if a completed operations claim arises after the policy is cancelled. How long you should keep coverage in effect depends on the type of work you do and your confidence in the work you did.

EXAMPLE: a plumber fixes a pipe and the connector is not tight and water is seeping from the joint. This is not visible and does not manifest itself as a claim until 2 years later. By the time it is noticed, the drywall needs to come out, the pipe needs to be repaired and the wetness needs to be treated so Mold doesn’t get ahold. If this plumber has had continuous coverage, his current Insurance Company will pay for all services except fixing the pipe (that’s workmanship). If this plumber closed his business and cancelled his policy or had a gap in coverage and his current Insurance Company added a prior work exclusion, then this plumber is on his own to fix all the damage or be sued by the customer.