Decline

What is decline?

In small business insurance, “decline” means an insurance company has decided not to give you coverage.

This could be because they see you as a high risk, or maybe you’ve made a lot of claims in the past. Sometimes, it’s just that your situation doesn’t match up with what they’re willing to cover.

This is different from “non-renewal,” which is when they choose not to continue your coverage after your policy term is up.

Why would an insurance company decline coverage for a small business?

Insurance companies might decline to insure you in cases of:

• High-risk business: If your business is known for having a lot of accidents or claims, like building or heavy manufacturing.
• Poor claims history: If you’ve had many big and frequent claims in the past, insurers anticipate more will follow.
• Dangerous location: If your place of work is located in areas with common hurricanes, floods or earthquakes.
• Poor safety precautions: Lack of safety rules and not adhering to them — for example, no safety gear or safety education — means higher risk.
• Financial instability: Poor credit scores and financial issues are a signal that you might not be able to pay premiums or have liability problems.
• Unusual or unique risks: Each business has unique risks based on industry, type of work, and location.

To avoid being declined, think about conducting safety audits, training your team and beefing up your workplace security.

When applying for insurance, make sure all the information you provide is accurate and complete. If you’ve had claims in the past, show your insurer that you’ve taken steps to prevent the same issues from happening again.

Don’t be afraid to ask for help. Insurance brokers and risk management consultants can provide valuable advice.

How to appeal a declined insurance claim or policy application

When a small business is denied insurance, it’s more vulnerable to property damage, liability claims, lawsuits, regulatory issues and the associated costs. What’s more, securing contracts and loans isn’t easy.

So you’ll want to try to resolve or appeal the declined matter. You can do the following:

1. Review the decline notice: Understand the specific reasons for the decline and formulate an appeal based on them.
2. Gather additional information or evidence: Compile detailed business records, proof of risk mitigation strategies or updated financial statements.
3. Consult with an insurance broker or agent: A professional can guide you through the appeals process, provide insights into the decline reasons and assist in effective communication.
4. Prepare a formal appeal letter: Clearly state the reasons for the appeal and include any additional information or evidence to support your case.

Secure your business with NEXT Insurance

No one wants to be left without cover. NEXT makes it easy to get the business insurance coverage you need. Our policies are customizable, easy on the budget and a breeze to manage.

You can start a quote, customize your options and access your certificate of insurance online immediately — in about 10 minutes.

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