Maintaining or adjusting coverage during a slowdown or business transition can make all the difference. The right insurance doesn’t just safeguard what you’ve built, it protects the future you’ve worked so hard for.
Insurance isn’t just a line item on your balance sheet; it’s one of the four pillars of a stable economy. It gives you the ability to borrow, to grow and to weather change with confidence.
When stress meets risk
Small business owners wear every hat — CEO, HR manager, accountant and sometimes even cleaner. With so much on your plate, it’s easy to view insurance as a commodity instead of a cornerstone.
We get it. Premiums add up, and renewal meetings can be overwhelming. But what we often see is that when business owners underinsure or cancel a policy during hard times, the real cost shows up later in claims that could erase years of work.
It’s not about having the least expensive coverage. It’s about having the right coverage, one that reflects your risks today and the exposures that could follow you tomorrow.
The hidden dangers after you close
Even after a business closes or changes hands, exposures can continue. If you’ve ever manufactured, imported or installed a product, your liability doesn’t necessarily end when you lock the door for the last time.
A single claim can surface years later — for example, a past plumbing job that results in a water leak or a product defect that causes injury. Without liability coverage in place, even groundless lawsuits can be costly to defend. That’s why maintaining some level of protection during a transition period is essential.
Lessons from the field: the “leaky condo” legacy
A powerful example comes from British Columbia’s leaky condo crisis of the 1980s and early 2000s. Thousands of residential buildings were built with materials and designs that couldn’t withstand the West Coast’s heavy rainfall. Moisture crept into walls, causing rot, mould and structural damage — and the repairs ran into the billions.1
As owners and strata corporations sought compensation, lawsuits swept through the construction industry. Everyone from major developers to small subcontractors was named. Some had stopped operating years earlier, but their work remained tied to those buildings.
For those who had cancelled their liability policies, the outcome was devastating. With no active or “run-off” coverage to defend them, many faced personal financial losses.
That crisis reshaped how our industry thinks about long-term exposure. We help clients plan for long-term exposures because we know how important it is to stay protected.
Balancing affordability and protection
You don’t need every coverage forever, but you do need a transition plan. For contractors, manufacturers, and professional service firms, we recommend keeping liability insurance for at least two years after closing or selling.
Run-off or completed operations coverage protects your past work without charging for new projects, offering affordable peace of mind. You’ve invested years into your business. A transition plan helps ensure that work stays protected.
Insurance conversations that matter
Good insurance starts with honest dialogue. Trust grows through clear communication and understanding. You’ve built a life and a future. If a claim happens, the right plan helps protect what matters most. Our role is to have those conversations, not to scare but to prepare. Every business is unique, which is why we focus on protecting what matters most to you, not just selling a policy.
Resilience through uncertainty
Markets shift, but resilience keeps businesses moving forward. We’ve seen clients adapt and recover through every cycle.
If you’re uncertain, start by talking with your broker or insurance provider; there are often ways to adjust coverage without losing protection. In volatile times, continuity and peace of mind matter most.
At HUB, we’re here to help you stay protected and ready for what’s next.
1 CBC News, “20 years after B.C. inquiry into the leaky condo crisis, it's still buyer beware,” April 7, 2018.
