Think of your business insurance as a safety net designed to protect your company. As your business expands and evolves, the demands on this safety net increases, potentially creating gaps and holes in your protection. By regularly reviewing your business insurance policy, you’ll ensure this net remains strong and catches you if something unexpected happens. If you’re unsure how to begin, don’t worry. Here are eight steps to help you effectively review your business insurance policy in a way that’s easy to understand and helps you feel confident you’re protected.
8 Steps to Effectively Review Your Business Insurance Policy
1. Start by Understanding What You Have Now
Before you make any changes, take some time to really understand what your current insurance covers. Read through your policy and figure out what each part protects and, just as importantly, what it doesn’t. Pay close attention to the coverage limits, which is the most your insurance will pay out. Is it enough? Make sure these limits still adequately reflect your business’s current value to avoid being underinsured.
2. Think Ahead: How Growth Affects Your Insurance
When your business grows, it often faces new risks. Whether you plan to sell new products, open new locations, or hire more staff, these changes affect your insurance. It’s a good idea to think about these changes early and how they might create new risks for your business. Also, consider any general risks you see coming, like changes in the economy, new technology, or new rules, that could cause unexpected problems or costs.
3. Assess Your Current Risk Profile
Take a close look at your business right now and see if any new risks have appeared. For example, if you’ve started offering specialized services or are working with potentially dangerous materials, your current insurance might not be enough. Make sure your insurance covers the possible issues that could arise from these risks, like damage to property, employee injuries, or lawsuits. Then, adjust your coverage if needed.
4. Check Each Type of Business Insurance Policy
Different types of business insurance protect against different things, and depending on your business, some might be more important than others. Review these common policies to ensure they still meet your needs:
- General Liability Insurance: A general liability insurance policy covers a wide range of common accidents, such as bodily injury or property damage to third parties (non-employees) that your business causes.
- Commercial Auto Insurance: Commercial auto insurance covers the costs related to accidents involving vehicles your business owns, leases, or uses. This includes damage to the vehicles involved and injuries to drivers and passengers.
- Commercial Property Insurance: Protects your business’s physical assets such as buildings, equipment, and inventory, against damage from fire, windstorms, and vandalism. It’s crucial to update your coverage limits to match the current value of your assets, especially after any renovations.
- Workers’ Compensation: This provides benefits to your employees who suffer work-related injuries or illnesses. This coverage can include medical expenses, lost wages, and rehabilitation costs, and it typically protects you from lawsuits related to these injuries.
- Business Interruption Insurance: This helps replace lost income and cover certain continuing operating expenses if your business is temporarily forced to shut down due to a covered event, such as a fire or natural disaster.
- Cyber Insurance: With more and more business happening online, consider whether you need protection against things like data breaches, cyberattacks, or other technology-related problems. This coverage helps your business recover from such incidents.
5. Pick the Right Deductible
One thing people often don’t think much about when reviewing their business insurance policy is the deductible. This is the amount of money you must pay out of your own pocket before your insurance starts to pay. While a higher deductible can make your insurance payments lower, you need to be sure your business can afford to pay that amount if you have a claim. On the other hand, a lower deductible might mean higher monthly payments, but it could be a safer choice if your cash flow is tight. The key is to find a balance between what you pay regularly and what you could afford to pay if something goes wrong.
6. Talk to Your Insurance Expert
Your insurance agent is a helpful person to talk to when reviewing your coverage. They can help you see if you don’t have enough coverage or if you have too much. They can explain the details of your policy, suggest other types of coverage you might need, and give advice based on new risks or changes in the rules. Their knowledge can help you make smart choices and ensure your insurance fits your business perfectly.
7. Compare Prices and Coverage From Other Providers
Even if you’re happy with your current provider, shopping around and obtaining quotes from other insurers is good practice. Insurance companies often change their prices, and you might find better rates or coverage elsewhere. When comparing rates, make sure you’re comparing the same coverage amounts and terms as your current policy to avoid ending up with less protection. Switching insurance providers can sometimes save you money and even provide better coverage.
8. Update Your Coverage to Reflect Changes
Once you’ve reviewed your coverage and gathered all your information, it’s time to update your policies. If your business has expanded or changed in any way – whether it’s in new locations, additional employees, or new equipment – be sure to reflect those changes in your insurance coverage. This may involve increasing limits, adding new types of coverage, or removing outdated policies that no longer apply.
Review Your Policy and Get a Quote
Insurance is not a one-size-fits-all solution, and as your business evolves, so should your coverage. Regularly reviewing your policies helps prevent unexpected coverage gaps, ensures compliance with legal requirements, and can even save you money. If you’re unsure where to start, give us a call today, at (866) 570-7335. Our specialists are here to provide you with a customized commercial insurance quote and ensure your business has the protection it needs.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may differ from those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
