One of the keys to managing risks when you first start a business is getting the right insurance to cover your operations, property and potential liabilities.
But as things go along, many business owners fail to update their coverage and just renew them year after year even if their company grows, expands operations and facilities, and adds new equipment and property. So, the old coverage becomes inadequate.
Business owners should review policies every year and make sure they are not underinsured.
Outgrowing coverage
As your business expands, you may outgrow the small business (Business Owners Policy or BOP) policy they start with and need additional coverage to manage
Some examples:
- Workers’ comp. You likely needed a workers’ comp policy when you made your first hire, you will need to update it as you add more staff. If you don’t, you will face a hefty bill for additional premium on audit.
- Excess umbrella or liability coverage. You should consider this insurance to cover claims that exceed your basic liability limit, thereby providing you with an added layer of protection to protect your assets.
- Professional liability insurance. These policies provide coverage for mistakes for professional services you provide. This used to be mainly for doctors, attorneys and accountants, but as our service sector has expanded it includes services provided by coders and software developers, appraisers, consultants, real estate brokers, graphic designers and home inspectors, among others.
- Auto, non-owned and hired coverage. Even if you don’t own autos, you need this coverage to protect your business if an employee has an accident while driving a rental or personal vehicle on the job.
- Employment practices liability insurance. This covers human resources issues related to discrimination, harassment and termination.
- Commercial auto insurance. This coverage protects autos that are not under a personal policy.
- Directors and officers liability coverage. This protects officers and directors in the event they are sued for wrongful acts while on duty.
Depending on the business, some or most of these insurance options may be required for adequate protection. Annual reviews with us are a great time for discussing your options. Make sure these elements are considered:
- Review the limit (amounts) of insurance you have and remember to adjust for inflation and increased cost of construction!
- While revenue is an important consideration, it is also important to remember that it is a potential liability – remember to adjust your limits to account for increased time needed to rebuild ./ relocate / resume.
- For general liability be sure to report any moves additions or closed locations..
- People who are serving new industries or clients may have problems with their professional liability coverage if they have large amounts of high-risk industries or customers.
- If you experience an increase in the number of workers you have, or there is a higher turnover rate, it is important to think about employment practices liability coverage.
Take the time to do this.. call us for a review appointment!
201 945 3100