When an insurance company won’t provide coverage for a specific person or entity.


What is decline?

In small business insurance, “decline” means an insurance company has decided not to give you coverage.

This could be because they see you as a high risk, or maybe you’ve made a lot of claims in the past. Sometimes, it’s just that your situation doesn’t match up with what they’re willing to cover.

This is different from “non-renewal,” which is when they choose not to continue your coverage after your policy term is up.

Why would an insurance company decline coverage for a small business?

Insurance companies might decline to insure you in cases of:

  • High-risk business: If your business is known for having a lot of accidents or claims, like building or heavy manufacturing.
  • Poor claims history: If you’ve had many big and frequent claims in the past, insurers anticipate more will follow.
  • Dangerous location: If your place of work is located in areas with common hurricanes, floods or earthquakes.
  • Poor safety precautions: Lack of safety rules and not adhering to them — for example, no safety gear or safety education — means higher risk.
  • Financial instability: Poor credit scores and financial issues are a signal that you might not be able to pay premiums or have liability problems.
  • Unusual or unique risks: Each business has unique risks based on industry, type of work, and location.

To avoid being declined, think about conducting safety audits, training your team and beefing up your workplace security.

When applying for insurance, make sure all the information you provide is accurate and complete. If you’ve had claims in the past, show your insurer that you’ve taken steps to prevent the same issues from happening again.

Don’t be afraid to ask for help. Insurance brokers and risk management consultants can provide valuable advice.

How to appeal a declined insurance claim or policy application

When a small business is denied insurance, it’s more vulnerable to property damage, liability claims, lawsuits, regulatory issues and the associated costs. What’s more, securing contracts and loans isn’t easy.

So you’ll want to try to resolve or appeal the declined matter. You can do the following:

  1. Review the decline notice: Understand the specific reasons for the decline and formulate an appeal based on them.
  2. Gather additional information or evidence: Compile detailed business records, proof of risk mitigation strategies or updated financial statements.
  3. Consult with an insurance broker or agent: A professional can guide you through the appeals process, provide insights into the decline reasons and assist in effective communication.
  4. Prepare a formal appeal letter: Clearly state the reasons for the appeal and include any additional information or evidence to support your case.

Secure your business with NEXT Insurance

No one wants to be left without cover. NEXT makes it easy to get the business insurance coverage you need. Our policies are customizable, easy on the budget and a breeze to manage.

You can start a quote, customize your options and access your certificate of insurance online immediately — in about 10 minutes.

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Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.
General Liability insurance
General Liability
Protect yourself from accidents that cause physical injury or damaged property.
Professional Liability or Error and Omissions Insurance
Professional Liability/E&O
Shield yourself from lawsuits that claim your work errors caused financial losses.
Workers' Compensation Insurance
Workers’ Compensation
Cover medical bills and lost wages if your employees have an accident at work.
Commercial Auto Insurance
Commercial Auto
Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.
Tools & Equipment Insurance
Tools & Equipment
Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.
Commercial Property Insurance
Commercial Property
Keep your building, inventory and equipment protected from fire or water damage.
Business Owner’s Policy Insurance
Business Owner’s Policy
Combine general liability and commercial property into one policy to protect your business.
* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.