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We have a cleaning business that I have had liability insurance

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We have a cleaning business that I have had liability insurance for for the last 3 years. I need to add we have never had a claim filed against our policy. My premium came due June 3rd. After talking with different people in the business I was told we were paying way too much for our annual premium. So I shopped around and found one that was about $400 less in the annual premium. So I decided to switch and I paid the premium full in June, 2011 only to received a call the second week of July stating it was a brief audit and I needed to answer a few question...all of the questions were straight forward with the exception of one...They asked me if I had ever filed bankruptcy. I was floor but answered yes I had, but made sure the guy knew it was personal bankruptcy not thorough the business. Well I have just received a letter informing me my policy has been cancelled. Reason given I filed banckruptcy. I have a 3 part question: How can they do that to a business because it had nothing to do with my business. 2.) how am I going to get other insurance since I am being cancelled and any insurance application will ask if you ever had a claim filed or if you have ever been denied or cancelled. Would I not have to say yes now that this has happened?

Linda Roch :

Hello and welcome! If you have any other questions, please let me know or please click Accept.

Linda Roch :

This is an unfortunate situation.

Linda Roch :

They can ask you if you filed bankruptcy but you can call back and make sure they understand that it was a personal bankruptcy and not a business bankruptcy, but please understand that they probably were asking about personal as well as business bankruptcy because for small businesses, your personal bankruptcy is what usually happens as few small businesses actually file business bankruptcy.

Linda Roch :

Thus, if you were having financial difficulties, you could just close your business and file personal bankruptcy and that would eliminate your liability on your debts, both business and personal.

Linda Roch :

So at this point, you will have to disclose that you filed bankruptcy when asked or you risk them canceling you at any time and backdating the cancellation if they find it in an audit and bankruptcy is public record.

Linda Roch :

My best advice is to try to go back to your old insurance company and see if they will take you back

Linda Roch :

Please press Accept.

Customer:

And if they (the old insurance carrier) refuse to take me back?? Is there any carriers out there that could help me"?..my business is working with high end clients and it is important I have liability insurance.

Linda Roch :

If they refuse to take you back, you just have to try every single carrier out there as each carrier has different requirements, but to make things easier, make sure to tell them that you have had a bankruptcy at the start.

Linda Roch :

You may have to pay more but at least you'll have insurance.

Customer:

thank you.....

Linda Roch :

You're welcome and good luck!

Linda Roch :

Please press Accept.

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