Small-scale businesses are always expanding and evolving. In the process, commercial insurance can be ignored by owners who are busy with managing costs, finding new customers and avoiding risks.
While business owners may have numerous essential tasks to complete not ensuring that you are covered by business insurance can land you into hot water. Insurance isn’t one-size-fits-all and is often complicated to comprehend. However, it is crucial to regularly review your insurance coverage to ensure you are covered in case of emergency.
Perhaps your business has expanded or made modifications? The magnitude and importance of your business must be accurately represented in your policies as well as the amount of coverage you’re carrying. The bottom line is that you need the small-business insurance policy to be able to cover any claim you might face.
If your insurance policy isn’t current enough to meet the demands of needs, you could be forced to settle property claims using personal funds, or obtain another loan to finance small-business litigation.
Thus, every small business owner needs to be aware of these nine signs that indicate it’s time to rethink your policies and ensure that your company is financially secure.
Changes in Business Situation
Based on the length of time your business has been in operation the company might not be exactly the same that it was when it first began and your insurance policy should reflect the fact that. Many times, companies are not covered as the policy originally issued simply renewed without considering the changes in their activities. The pull and push of market forces will impact your decisions will change as a result.
Modifications to the Business Product or Service
In many cases, companies broaden or restrict the range of services or products they offer to remain competitive in a environment that has changed due to external environmental factors. Any modification in the product or service could impact a company’s risk exposure. Therefore, it is crucial to talk to your insurance agent to make sure you have sufficient insurance coverage to cover.
Expanding Office Space
If you decide to relocate or extend your office space, the value of your building and the potential for hazards could change. In the example above, let’s say you move to a place where there is a higher risk of theft or vandalism, or the area that has a large population density. If so, your place you live in will also determine the rate you pay.
New Business Equipment
It’s machinery and tools or technology and computers, entrepreneurs need to have their equipment to be covered the business grows and requires more equipment.
If your new piece of equipment is damaged, your small business insurance coverage might not be able to cover the costs of repairing or replacing it. Business owners must consider upgrading their insurance policies when they see their investment rises to ensure that there is enough insurance coverage to cover eventual losses in the event that you have to file claims.
To ensure that you have adequate protection for your business equipment, keep up-to-date and accurate list of all your equipment and inform the small-business insurance broker prior to the date of your purchases, to ensure that you are properly covered.
Hiring New Staff
As your company expands in terms of revenue and square footage it is likely that you will add more employees to help meet the growing demand. The increase in staff is, in turn, a source of an increased risk for the company. As it is, owners of must renew their insurance in order to meet the size of their business.
Not paying attention to the employees your company has is not just a bad business decision and could also cause you to be without insurance protection. If you subcontract work be sure the subcontractors are covered by the appropriate liability coverage case of an action. Small insurance agents can assist in determining the best small-business insurance coverage for your employees.
Modifications to Company Vehicles
Every vehicle that is used for business purposes by an employee or you must be covered with commercial auto insurance. If you’ve added cars to your fleet of commercial vehicles be sure to have additional insurance in the event in the event of an accident.
Employees who utilize their personal automobiles for purposes might also require insurance. Employees may have normal vehicle insurance policy, but should they be involved in an accident working they could claim injury, damages or time lost away from work.
You’ve Added New Vendors or Customers
Maybe you’ve joined forces with a new company or made a deal with a new customer. The contract you signed may need you to carry certain types of insurance that aren’t covered under the existing policy. Certain industries also require third-party service providers to acquire specific protections, like cybersecurity insurance, which protects private data of clients.
Compliance Rules and Regulations
State and federal regulations can make certain industries or to buy a specific kind of insurance. If new regulations were implemented, you might need modify your current policies, as the amount of insurance you need may change.
Significant Growth in Revenue
In the business world, “more money, more difficulties” is true. When the revenue of your small-scale increases as does the risk of exposure and potential problems. The more money you earn and in relation to commercial liability insurance as well as commercial interruption insurance greater protection you’ll need.
If, for instance, you expand production of products over the course of a year the more people will purchase the item, increasing the risk and requiring an additional insurance policy. If the income of your business has increased, consult you small company insurance agents regarding adjusting your insurance.