Once a year, your business will get a piece of mail stating that its business insurance is up for renewal. In most cases, it will include a quotation of the premium and a request for payment. It is tempting for the busy entrepreneur to just make the payment and not worry about the issue for another year. In a high growth company however, a lot could have changed over the last 12 months and your business may no longer be adequately covered by your existing policy.
We recommend that the insured work with their broker to review coverage needs prior to the expiration of the existing policy. The first question a small business owner should ask is, “How have my operations changed?” In today’s fast changing business environment, many businesses plan to do one thing, but end up doing something else entirely. These changes in operations change the risks that need to be insured and that needs to be taken into consideration when the policy is renewed.
Another question that needs to be asked is if the value of the Business Personal Property on the insurance policy is reflective of the property’s actual value. When a business grows, it accumulates additional furniture, fixtures and equipment to accommodate its growth. This should be accurately reflected in the commercial property section of a Business Owner’s Policy (BOP) or Commercial Property Policy to make sure the property is adequately protected. Have the places that you use your business assets expanded from the office only to on-the road? If so, an Inland Marine policy may offer broader coverage than a Commercial Property policy for your assets while they are in transit.
Both Commercial Property and Commercial Liability policies have provisions for deductibles. A small business owner needs to determine if the amount of the deductible is suitable for the needs of the business. Specifically, can the business can afford to participate in the risk of a loss through the deductible at its current level or does it need adjustment?
Businesses should also consider the addition of an Umbrella Policy (to cover losses in excess of their existing insurance policies). For a reasonable premium, business owners can add an additional layer of protection from liability claims and other losses.
If a business has employees, it should consider purchasing Employment Practices Liability, and Employee Benefits Liability coverages. Employment Practices Liability coverage protects a business against allegations of wrongful acts suffered by an entity’s employees. Employee Benefits Liability coverage provides coverages for any fiduciary responsibilities an employer has related to offering health and retirement benefits to employees as well as coverages for suits related to the administration of an employer’s benefits programs.
If the entity is a corporation, investors and managers should think about purchasing Directors and Officers Liability insurance. This coverage provides indemnification and defense for a corporation’s Directors and Officers against claims or suits involving the corporation in which they are personally named as defendants.
If you run a small business, is your current insurance broker is meeting the needs of you and your business? If you would like to see how we can help your business plan and optimize its coverage, contact us at 1-877-900-9998 or go to https://www.bizinsure.com.