5 Signs You’ve Outgrown Your Small Business Insurance
Tuesday, 28 July 2020
We know it’s exciting and rewarding to see your business grow, and at BIG, we also recognize it requires a lot of hard work and dedication. When you first purchased a small business insurance policy, you may not have known what you were looking for, but as time progresses and your policy renews, it’s crucial to review the coverages you have with a trusted broker. If you have outgrown your current coverage, your small business insurance policy may not cover a claim, which could cause significant financial setbacks or even put you out of business. Remember that, as your business grows and changes, so must your business insurance policy. Read these 5 signs that your small business insurance needs an update and contact one of our trusted brokers to update your policy.
Why Should You Update Your Small Business Insurance?
Your business is constantly changing and adapting, and insurance for business is not a ‘one-size-fits-all’ product. Your commercial insurance broker takes into account your industry, your revenue, and the risks you face to determine the coverage you require. As the risks of your business change, you may need to add coverages in certain areas, or, you may be paying for coverage you no longer need. The bottom line is that you want your small business insurance to cover any claims you may have. If your insurance is not updated to cover your business needs, you may have to pay the costs for property claims or lawsuits out of your own pocket.
1. Update Your Small Business Insurance if You have Significant Growth in Revenue
When it comes to business the phrase, “more money, more problems” rings true. As your small business grows in revenue, your risk exposure (potential problems) increases. Both in the realm of commercial liability insurance and business interruption insurance, the higher your revenue, the greater coverage you will need. For example, if you double the manufacturing of products in a year, more customers are purchasing the product increasing your risks, which means you will need higher coverage. If you have seen an increased revenue in your business, have a discussion with your broker to adjust your insurance for business.
2. If you Change your Products or Services, you should Update Your Small Business Insurance
With many businesses adapting to the situation with COVID-19, you may have widened or narrowed the range of services or products you offer. Either way, a change in products or services can alter your risk exposure. Consider a landscaper, for example. In Canada, landscapers are generally seasonal workers. If, in order to generate more income in the winter, a landscaper decides to include snow removal in their business services, this introduces a new set of risks. Aside from the increased revenue, snow-removal is also a high-risk industry where you see a greater number of liability claims related to slip-and-fall accidents. If you have introduced delivery services for your business, you may also need commercial auto insurance for your drivers – read this blog to find out more about delivery driver insurance. Whatever the change in products or services, it’s crucial to have a conversation with your commercial insurance broker to ensure you have the proper coverage for your business’ risks.
3. Update Your Small Business Insurance if You Move or Improve Your Office Space
Depending on your policy wording, commercial property coverage insures your business property against named perils listed on your policy, or a broad form will cover any risk that is not excluded in your policy wording. If you move to a new location, or expand your workspace, your property value and potential risks will change. The location is also a factor in determining your rate if you move to an area that has a higher rate of theft or vandalism, or you simply move to a location with a higher population density.
4. Hiring More Employees is a Reason to Update Your Small Business Insurance
As your small business grows in revenue and expands in square footage, you are likely able to hire more staff in the process. Adding more employees, again, adds more risk exposure. If you contract out any work, make sure that sub-contractors are covered by their own liability insurance in case you are named in a lawsuit. Your broker will be able to help you find the best coverage for your employees on your small business insurance.
5. Update Your Small Business Insurance if you have Purchased New Equipment
Whether it’s tools and machinery, or computers and technology, as you expand you will want better coverage for your equipment. If your new equipment breaks down, your existing small business insurance policy may not cover the cost to replace or repair it. Usually contents insurance and insurance for equipment breakdowns have a specific limit of coverage (ie. $40,000). In order to have adequate coverage for new equipment, let your commercial broker know at the time of purchase so that you can be properly covered.
What is the Cost to Update to My Small Business Insurance Policy?
There are so many variables affecting insurance for business depending on your industry, your revenue, and the number of employees or size of your business. If you are ready to update your small business insurance policy, speak with one of our BIG commercial brokers or get a quote here. Make sure updating your business insurance policy is a top priority as your business grows.