If your business is growing, your insurance needs might be, too

Every business needs commercial coverage for things like liability, property insurance, workers’ compensation, and commercial auto. As a business owner, it’s important to do a periodic review to make sure you have the proper coverages. Perhaps your business has grown, or you’ve made changes? Your policies and the amount of coverage should reflect the scope and value of your business.

We go over eight changes that could mean you need to update your commercial policies.

1. Business owners insurance

Business owners insurance is meant to pay for damages to property, general liability, and business interruption, among other things. As your business grows, the amount you stand to lose increases, too. If your business has to shut down, the losses will add up quickly.

The policy you bought for a small business with a few employees may not be adequate to cover your expanded operations and additional employees. Do an assessment and make sure you secure more coverage.

2. You upgraded your workspace

Perhaps you’ve upgraded your office or built an addition. Even if you rent the space, you still might have made some changes. You should be insured for the cost of rebuilds or replacing old space or equipment.

If you ever experience property loss or damage, you will only be paid the maximum amount associated with your current policy. That may not be enough to replace or repair your property.

3. You bought new equipment or added new products

Have you upgraded office equipment or machinery? Maybe you bought new computers for everyone or changed your network system.

Review your insurance policy to ensure you have adequate coverage to repair or replace the new equipment, as it’s most likely worth more.

Or perhaps you added new products to your line of inventory. Look into adding more product liability insurance in case anything is defective or causes unforeseen injuries. Your new products should also be covered in case they are stolen or damaged. If they’re not part of your policy, you could be underinsured and have to make up the difference out of pocket.

4. Commercial auto insurance changes

Any vehicle you or an employee operates for business purposes should be covered under a commercial auto policy. If you’ve added vehicles to your fleet, make sure you purchase additional coverage in case there is ever an accident. 

Employees who drive their personal vehicles for business purposes may need coverage, as well. Your employees may have a regular auto policy, but if they get in an accident on company time, they could sue you for damages, injuries, or time lost from work.

5. You’ve added new vendors or clients

Perhaps you’ve partnered with a new vendor. Have you signed with a new client? Your contract might stipulate that you need certain types of insurance that isn’t covered under your current policy. Some industries also require third-party vendors to buy specific coverage, such as cybersecurity insurance to protect private customer data.

6. Compliance regulations

Federal and state laws can stipulate that certain businesses or industries must buy a specific type of policy. There might also be changes to the amount of coverage you need. New regulations may have passed, and if so, you’ll need to update your existing policies.

7. Director’s and officer’s insurance

Have you grown so much that you now have a corporate board? If you’ve added directors or officers who make decisions about your company, you’ll need insurance for them. This provides protection for your board in case you’re ever sued. Otherwise, they might be held liable for business decisions.

8. Changing your legal entity status

Perhaps you went from just yourself to having a small staff of employees. You might have started out as a Sole Proprietorship, but now it’s time to change to an LLC or Corporation. There are several reasons why you need to make this move, but it can also affect the type of insurance coverage you need.

You will need workers’ compensation if you have three or more employees, for instance. Your overall business liability should also be increased to protect you in case of a lawsuit.

Protect your business with the right commercial insurance

It’s a good idea to review your business insurance needs, especially if you’ve grown or made changes recently. The goal is to make sure your growth doesn’t hurt you in the end.

We can help you update your policies and increase coverage to compensate for those changes. We offer a number of business insurance policies, including: 

  • Commercial property
  • General liability
  • Commercial auto
  • Workers’ compensation
  • Professional liability
  • Employment practices
  • Commercial umbrella

Contact us to talk about your commercial insurance needs and request a quote. We will ensure you have the right coverage to protect the business you’ve worked so hard to grow.

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.