When to Reconsider Your Business Insurance Coverage
Business insurance is necessary for protecting you, your workers, and your assets, but insurance should never be static. As your business changes, and so should your coverage. Reassessing your policy saves money and ensures you are protected from any potential liabilities.
If you start offering new services, hire more employees, acquire a new building or vehicles, and other major changes, you will need different coverage. To ensure you’re getting the best coverage at the best rate, you should reconsider your insurance coverage in the following situations:
You’re Unsatisfied with Your Current Provider
Maybe it feels like you pay too much or haven’t been happy with the service or response times. Whatever it is about your current insurance provider that you don’t like, it’s a sign to shop around. Here’s what to do:
- Start by assessing your current status, including the number of workers, the value of assets, vehicles, and anything else that may have changed since you last bought or changed your policies.
- Consider getting a business owner’s policy. You can save money with this bundle of liability, commercial property, and business interruption policies.
- Work with an agent if you’re unsure about how much coverage you need. These experts can educate and guide your choices.
- Request a quote for small business insurance from multiple companies. This takes time, but in the end, you can save money by doing the leg work.
You Change Your Legal Entity Status
Changing the legal entity means changing insurance needs. For instance, if you go from a sole proprietorship to an LLC, your liabilities shift. Entity changes can impact several aspects of a business that affect taxation, personal liability and risks, and insurance coverage needs.
You Significantly Expand Your Workforce
A larger workforce changes a lot in terms of liability—the more people you have working for you, the higher the risk of accidents and mistakes. As you expand your employee pool and payroll, you’ll likely need to reassess your liability insurance policies, auto insurance if they will be driving, and workers’ compensation coverage.
You Open a New Location
Commercial property insurance protects your assets, including buildings and everything in them. With a new location, you have more assets and more value that need protection.
Even if you are only moving locations, not adding to the overall value of your commercial buildings, you may need to adjust coverage due to location-based liabilities, such as crime rates.
You Introduce New Products
Adding new products to your offerings means adding new risks. You risk being underinsured if you don’t adjust coverage for your liability policy. Product liability insurance covers costs associated with defective products that cause harm and the resulting lawsuits.
You Start Offering a New Service
As with new products, a new service offered to customers expands risk. The same is true if you offer services to an expanded client list. New contracts add risk to your business and more opportunities for liability issues. If you don’t have enough professional liability coverage, you could end up paying big for any mistakes or negligence.
You Add or Expand Your Fleet of Vehicles
Business auto insurance protects your business from the risks associated with having employees driving on the job. They may get into accidents, and you can be held liable for their injuries, damage to your vehicles, and harm or damage to bystanders or property.
More vehicles in your fleet mean more risk. You will need more coverage to mitigate those risks. The cost of this type of insurance depends on the value of the vehicles. It also depends on the people driving them, their records, and even their ages. If the employees who are driving change, you may need to reassess coverage.
When Your Contract is Up
Any time your contract for a policy ends, you should reassess your needs, coverage level, premium costs, and deductibles. Make this a regular practice to make sure your business stays safe from risks and that you’re not paying too much.
Don’t Become Complacent with Coverage
No one really likes to deal with insurance or shop around. It’s not the most interesting aspect of business ownership, but it is essential to avoiding ruinous out-of-pocket expenses. Take the time and make an effort to reassess your insurance to save money and maintain the best coverage for your current needs.
