When setting up your business, remember to apply for adequate commercial insurance coverage. However, focusing on the day-to-day running of a business can make it easy to forget about your insurance coverage. Why is it necessary to review commercial insurance policies? Simply put, if you’ve gone years without revising your insurance policies, your business can run the risk of being – or becoming – underinsured.
Reviewing your insurance policies yearly ensures that your policies are always up-to-date and that you’re always covered. Here are some reasons why you might need to update your existing policies.
Review Your Insurance Policy if Your Business Has Expanded
While an increase in business review is something to celebrate, it also could mean an increase in your potential liability. The more goods you sell, the more supplies, equipment, and inventory you’ll have. It’s paramount that your commercial policy covers it all. As well as an increased inventory and revenue, the number of employees you have is also something you should consider. The more employees you have, the larger their compensation insurance needs.
Changing or Adding a New Location is a Good Reason to Review Commercial Insurance Policies
If your business has grown since its inception, it’s likely that you have shifted to a larger facility or a location that is better suited for your business’s growing demands. The amount of square footage your business is spread across, or even the type of building you’ve shifted to, could affect the type and amount of insurance you require.
You or Your Business Have Purchased Additional Property
It may be a good idea to review your commercial insurance policy if you have done the following:
- Bought new or more equipment
- Updated your technology
- Added or eliminated items from any of your business’ locations
All of these are reasons to check the limits of your current commercial property insurance. You should also look into whether you will be compensated for replacement value or actual cash. If the additional property to your business is in the form of vehicles, you will also want to ensure that you have commercial auto coverage.
You’ve Changed the Way You Run Your Business
Your business practices will have likely changed with the times. You might be using a different technology or marketing strategy compared to when you first started. Perhaps the way that you store your data is different. It’s worth finding out if your current commercial insurance policy covers any liabilities that may have surfaced with the changes in your business practices.
Some Management Team Members Left or Were Replaced
If a crucial member of your team has changed, you will want to review particular dimensions of your insurance coverage. Key Person Strategies, Buy Sell Agreements and Deferred Compensation plans can all be affected by a change in key manpower.
You’re Offering New Products
If your business is offering a different range of services than when it started, you’ll want to check that your current insurance policy is covering these. The bottom line is that your business will likely look different now compared to its inception, so it’s always best that you’re covered for anything that might have changed. If you’re finding difficulty navigating the language of appraisal services, feel free to contact Stone Claims Group today.