Insurance Cancellation: The Fine Print

Insurance Cancellation: The Fine Print

Are you doing due diligence on a recent acquisition? Looking to swap out one product line for another? Selling a bricks & mortar location? Trimming bottom line costs as part of a business restructuring effort?

These are just a few reasons why you might be looking into the potential ramifications of insurance cancellation. As a consumer, you’re likely familiar with the benefits of purchasing cancellation insurance when you book travel. However, in your professional life, when it’s time to cancel a policy or reduce business coverage, there are a couple of basic definitions for insurance cancellation terms that you should be aware of.

Insurance Cancellation: Words to Watch For

Industry terms such as cancellable, cancel and rewrite and cancellation are described by the International Risk Management Institute (IRMI) in the following ways:

Cancellable…refers to the fact that most insurance contracts can be terminated by the insurer or the insured at any time. If an individual policy is not a cancellable policy, then it will probably be designated guaranteed renewable or non-cancellable. Individual life insurance policies are non-cancellable by the insurer. Most property and liability policies can be canceled.”1
Cancel and rewrite…refers to an insurer’s cancellation and reissuance of the same policy. Typically used to switch a policy renewal to a new date.”2
Cancellation is defined by IMRI as “the termination of an insurance policy or bond, before its expiration, by either the insured or the insurer. Insurance policy cancellation provisions require insurers to notify insureds in advance (usually 30 days) of canceling a policy and stipulate the manner in which any unearned premium will be returned.”3

Canadian Business Insurance: Learn More

Whether you’ve just launched a business, bought another company or are considering making changes to your insurance program, understanding the fine print in your insurance policy is a critical step in effective cost and risk management. The Insurance Bureau of Canada provides an overview of key types of business insurance coverage, deductibles and more at

Related Matters: M&A Insurance, Representations & Warranties Coverage

For small business owners, the Government of Canada’s Canada Business Network can provide helpful insights into types of insurance to consider. You can learn about insurance for your small business and more by visiting

Every ALIGNED Insurance Advocate is a subject matter expert in Canadian business insurance. Before you buy, change or decide to cancel an insurance policy, talk to ALIGNED about potential risks as well as opportunities.

Sources: 1,2,3 IRMI Canada Business Network

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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