What to do if our commercial liability insurance carrier is now requesting our financial statements?
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What to do if our commercial liability insurance carrier is now requesting our financial statements?
We have been in business for 20 years and haven’t had any claims. We have audits with them every policy year and already supply them with the information they request. Can they cancel our policy if we don’t now give them our financial statements?
Asked on June 27, 2013 under Business Law, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 10 years ago | Contributor
Whether they can cancel the policy during the middle of a policy term (e.g. if the policy is bought on an annual basis, before the end of the policy year) depends on what the policy itself says: does it give the insurer the right to seek additional information or to verify information at this time? If so, they can do this, since the insurance policy is a contract: they can exercise any rights given to them under the policy, and if you do not comply, you will be in breach of the policy, most likely giving them the right to terminate under the terms of the policy.
If they can't cancel mid-year, they can almost certainly refuse to review the policy again if you do not provide them the information they require.
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