Through a broker, and quickly, because every day without coverage adds to the problem. If the gap was short and nothing went wrong during it, many standard insurers will still quote you, sometimes with a surcharge. Longer or repeated gaps go to specialty companies, which a broker can reach. Who this is for: owners whose policy cancelled, expired, or was dropped, and who need coverage to work.
The short version
- Act today. You are covered when a new policy is issued, not when you apply.
- Expect three questions: how long was the gap, why did it happen, and did anything go wrong during it.
- A short gap with a good reason and no losses usually gets a standard quote. Longer gaps go to specialty markets.
- A lapse leaves you exposed for anything that happens during the gap, and the new insurer may exclude work you did before the policy starts.
- Sign the letter saying nothing went wrong, get your claims history, and let a broker send one application to insurers that accept lapses.
Why does a lapse make insurers nervous?
A lapse is a period when you had no policy in force. Insurers read it two ways. As a payment risk: if the policy cancelled for nonpayment, will theirs too? And as a coverage risk: did something happen while you were uninsured?
What does the gap do to my coverage?
| Policy | What the lapse leaves uncovered | What the new insurer will ask |
|---|---|---|
| General liability | Any injury or damage that happens during the gap. Work you finished during the gap is a separate worry: the new insurer may exclude work done before the policy started. | Whether they will exclude your prior work. Many insurers add that exclusion after a lapse, and some will not. |
| Workers comp | Any employee injury during the gap comes out of your pocket | When coverage ended, payroll during the gap, and whether the state has contacted you. Many states fine employers for each uninsured day. |
| Commercial auto | Any accident during the gap. Registration can be flagged. | Driving records, and proof the vehicles were parked |
A standard general liability policy is what the trade calls an occurrence policy. It pays for injury or damage that happens while it is in force, even if the work was done earlier. If you built a deck during a two month lapse and it fails a year later, the new policy would normally respond, unless the insurer excluded work you did before it started. Ask whether that exclusion is on the quote. What no policy will ever cover is damage that happened during the gap itself.
Where will I actually get quoted?
- Your old insurer, reinstated. If the lapse is a few days old and the cause was a missed payment, ask for reinstatement first. Some insurers allow it within a set window, with payment in full and a signed letter saying nothing went wrong during the gap. Windows vary, so ask today.
- Standard insurers that accept short lapses. Many will quote a gap under 30 to 60 days with a reason and that signed letter, sometimes with a surcharge.
- Specialty (surplus lines) markets. For gaps of several months, repeated lapses, or a cancellation for nonpayment on your record. Only a broker can reach these companies. Expect a floor on the price and payment up front.
- The state plan of last resort. For workers comp, either an assigned risk plan or the state fund. It has to take an employer that meets its rules, though it can refuse one that still owes a prior insurer premium. Expensive, but in states that require comp it stops the penalties. In North Dakota, Ohio, Washington, and Wyoming the fund is the only insurer. In Texas, comp is elective for most private employers.
That signed letter is called a no loss letter. It is one paragraph saying no claims or known problems happened during the gap. Your broker will hand you the form.
What will it cost compared to before?
Illustrative figures for a small contractor with a clean claims history. Your result depends on trade, state, and gap length.
| Your lapse | Likely market | Likely cost against your old premium |
|---|---|---|
| Under 30 days, missed payment, no losses | Reinstatement or a standard insurer | About the same, or 5% to 15% more |
| 1 to 6 months | Standard with surcharge, or specialty | Roughly 15% to 40% more in year one |
| Over 6 months, or two lapses in 3 years | Specialty markets | Roughly 30% to 80% more, plus payment up front |
What should I do in the next 48 hours?
- Stop uninsured work, especially anything with employees on site.
- Call your old insurer or broker about reinstatement. Get the cancellation date in writing.
- Request five years of claims history from every prior insurer.
- Write down why it happened in two or three honest sentences.
- Send it all to a broker who can shop standard and specialty markets at once.
Then keep it from happening again. Put the renewal date on your calendar 90 days out and read the renewal prep checklist, or see what a lapse does to your business.
What this looks like in real life
Illustrative example. It is typical of what we see and is not a promise of how any specific situation would be handled.
The setup: A flooring installer in Arizona with three employees misses two payments during a slow winter, and both policies cancel. He does not notice for seven weeks, until a general contractor asks for a certificate before a $40,000 job.
What went wrong: The old insurer will not reinstate after 30 days. Two online insurers decline because of the cancellation for nonpayment. The general contractor will not let the crew start.
What it cost: A broker got a signed no loss letter, five years of claims history, and a short explanation, then placed general liability with a specialty market at about $5,100 against the prior $3,800, and workers comp at close to the old price. Illustrative figures. The owner paid about $1,300 more and lost eight days on the job.
The fix: Set up automatic payments and a renewal reminder. If a lapse happens, call a broker the day you find out.
Frequently asked questions
Q: Where can I find business insurance after a coverage lapse?
Through a broker who can shop standard insurers that accept short lapses and specialty markets that accept longer ones. If the gap is only days old, ask your old insurer about reinstatement first.
Q: Will a lapse make my insurance more expensive?
Often yes, for the first year or two. Prices settle once you have a clean year behind you, so ask your broker to shop it again at every renewal until they do.
Q: Do I have to sign a letter saying nothing went wrong during the gap?
Almost always. It is a short signed statement that nothing happened during the gap that could become a claim. Nearly every insurer requires one before covering a lapsed account. Sign it only if it is true.
Q: What happens if my workers comp lapsed and someone got hurt?
You would owe the medical bills and lost wages yourself, and many states add a penalty for each uninsured day. Get coverage in place first.
Q: Is work I did during the lapse covered by my new policy?
Damage that happens after your new policy starts is usually covered even if the work was done during the gap, because the policy responds to when the damage happens, not when the work was done. The catch is that insurers often exclude prior work after a lapse. Ask whether yours does. Damage that happened during the gap is covered by nobody.
Q: How fast can a lapsed business get covered again?
Reinstatement can be same day. A new standard policy is often issued within a few days. A specialty placement usually takes one to two weeks.
How Morrow helps
Morrow is a licensed independent commercial insurance brokerage that works with contractors and trades every day. Getting a lapsed contractor covered again fast, with the signed no loss letter, claims history, and explanation the insurer wants, is work we know well.
- Free contract review. Send us the contract or bid documents and we mark up the insurance section in plain English, whether or not you buy anything from us.
- Free, instant certificates. Clients issue their own certificates of insurance online in about a minute, any hour, any day, at no charge.
- Markets you cannot reach online. One application, shopped across many insurance companies for general liability, workers comp, auto, umbrella, and pollution coverage.
One more thing. This article is general information and is not legal advice or a statement of coverage. Your contract and your policy wording control in every case. Requirements vary by customer, by state, and by insurance company, so have a licensed advisor review your own contract and your own policy before relying on any of it.
Last updated: Reviewed by the Morrow commercial lines team. Last updated September 2026.