Many contractors in the construction and renovation industries earn their living by inking short-term contracts to work on a particular project. Other contractors may shift their focus depending on the time of year. For instance, pursuing landscaping projects in the warmer months and providing snow plowing services in the wintertime.

As a result, some contractors may purchase short-term business insurance policies as their seasonal work dictates.

But you don’t have to work in the construction trades to be a seasonal contractor or business. Some small businesses only operate for half the year — for example, a gardening and landscaping supply store, or a campground or RV park.

A general contractor who's happy about being insured year-round.

However, there are benefits to acquiring an annual policy for your insurance needs instead of buying a short-term one.

Is Buying Seasonal Business Insurance Worth It?

There’s an argument to be made for buying short-term insurance coverage if you own a business that is only open a few months per year or for half the year. It’s common for business owners to think they’ll be saving money by only getting coverage to protect their companies during seasonal peaks. But that isn’t necessarily true.

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Shorter-term policies are not always cheaper than annual ones, and there’s a reasonable possibility the tax you pay on a policy could increase when buying insurance for less than a year.

Can You Temporarily Suspend Your Insurance Policy?

Most insurance providers frown upon the notion of temporarily suspending an active policy to restart it at a later date. That leaves you with the option of cancelling your policy and purchasing a new one when needed. But there’s a problem with doing that. 

Cancelling an annual policy leaves you exposed to damage and loss by creating a gap in your coverage. Many insurance providers might consider your business a higher risk if you cancel a policy, making getting insured more challenging or expensive. Although you may be entitled to a refund on the cancelled policy, you won’t get the total amount you paid back.

5 Reasons to Get Year-Round Insurance Protection for Your Business

Here are five reasons why you should consider getting year-round coverage for your business or profession:

1. An annual policy is usually cheaper

Commercial insurance policies typically cover you for a full 12 months before they expire (your broker or insurance provider will notify you a month or more in advance when your policy is coming up for renewal). However, some providers do not offer temporary or short-term insurance, making it more challenging to get covered. If you do find a provider that will sell you short-term coverage, it’s usually more expensive than an annual policy.

2. It covers your tools and equipment while in storage

With a short-term policy or if you opt to cancel your existing coverage, you’re leaving yourself exposed financially to potential risks if something happens. For example, suppose you operate a landscaping company. As your season ends and the temperature drops, you store the tools, equipment, and machinery you use. But what’s covering damage or loss to that equipment if they’re stolen or destroyed in a fire? Without annual insurance protection, you’d be on your own to pay for those losses.

3. You likely use your vehicle all year long

Chances are you continue to drive the pickup truck or vehicle you use to conduct business after your regular season ends. You should have commercial auto insurance for that vehicle. But if you cancel your policy or your coverage is limited to a portion of the year, you can’t drive it legally without insurance. 

For example, the owner of a food truck business may be active from springtime to autumn and park their truck for the winter. Even if you keep the vehicle parked all winter long and don’t drive it to an auto repair shop for maintenance or an oil change, it’s still susceptible to damage caused by extreme weather, theft, or vandalism. You’re on the hook for those costs if something happens to the vehicle without a policy.

4. It keeps your office or workplace protected

You might only frequent your office or place of business when you’re open for the season. However, you still need commercial property insurance to cover any damages to the building, its attached structures, and its contents and inventory. In some cases, you might want to look into vacant property insurance to protect yourself from financial losses if the building is broken into, damaged by fire or flood, or if someone is injured on the property and sues you for third-party bodily injury.

5. It makes bidding on projects easier

Having continuous insurance is great because it allows you to bid on and accept jobs on the fly without having to worry about the hassle of shopping for insurance in advance of every project you win.

Get a Free Business Insurance Quote in Minutes

Adequately covering your business and finances starts with getting a free contractor insurance quote from Zensurance. Through our partner network of more than 50 insurance providers, our friendly brokers can get the protection you need starting as low as $19 per month.

Fill out an online application for a free quote now and explore your options. Join thousands of other Canadian small business owners and self-employed professionals by letting us help you protect your business year-round so you can concentrate on serving your customers confidently.

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About the Author: Jon Hogg

Jon Hogg is the Senior Team Lead, Renewals, at Zensurance.