Is It Time to Review Your Insurance?

Since your last insurance review... 

• Has the name of your business changed?
• Have you restructured your company's ownership (e.g., gone from sole proprietorship to LLC or corporation) or added any DBAs (doing business as)?
• Has your business changed owners, partners or officers?
• Has the nature of your business operations changed?
• Do you now also service the products you manufacture?
• Have you changed or expanded the types of products you sell and/or services you offer?
• Do you have aging equipment or have you purchased new equipment?
• Have you added new locations, expanded into new states or outside of the United States?
• Have you closed or moved any locations? Has the mailing address or physical location of your business changed?
• Do you have a website? Do you sell products or collect information on that website? 
• Are you specifically covered for hacks, viruses and data breaches?

As a business owner, you turn to insurance to help you identify and address the unique threats to your goods, property, customers and bottom line. However, many wrongfully assume that once they’ve secured the proper coverage, all of their exposures are addressed and they no longer need to review their policies.

The truth is that changes in your business oftentimes expose you to new risks that you are not prepared for. In fact, there are a variety of scenarios that can have a direct impact on your level of risk and the amount of protection you need:

• Your business has seen significant financial growth—The amount of revenue you generate can impact the level of coverage you need. For example, while you may have purchased enough business interruption coverage years ago, disruption costs to your organization will be higher if you have a larger customer base and stand to lose more from prolonged closures.
• You make changes to your organizational structure—If you hire a new business partner or add a member to your board, you will need to ensure you have the appropriate amount of directors and officers coverage. What’s more, if any leadership leaves the company, you will want to check to see if you are overpaying for insurance.
• You add a new location or lease a bigger facility—If your business has changed location or you have added a facility, you may need more property insurance. As a general rule, you should have enough insurance to cover the cost of rebuilding your facility and replacing the contents of it following an incident. Even if you’ve simply renovated your building, the value of your property can increase, which can impact your insurance needs.
• You hire more staff—As you bring on more employees, you will need to secure more worker’s compensation coverage. Many experts recommend purchasing well beyond the legal minimum.
• You purchase more vehicles or equipment—Has it been longer than 12 months since you reviewed the limits of liability or provided by, or deductibles required by, your policy? Do new drivers need to be added to your policy? With every investment you make, you will likely need additional coverage. This includes any new vehicles you purchase. In addition, essential equipment will need to be insured, particularly if a breakdown could lead to closures and other disruptions.

Just one event can drastically change a business’s insurance needs. Reviewing your policies on a regular basis not only protects you from future losses, but also ensures you are not overpaying for coverage. Be sure to regularly discuss any new developments with our team.