When should you update your business insurance policy?
Every business is unique, which is why there is no one-size-fits-all solution when it comes to your business insurance coverage. You need to ensure you have the right coverage for your business, or you may end up having to pay out-of-pocket for costly damages and lawsuits against your company.
Over time, the structure of your business may change, which could require additional coverage. It’s important to revise your business insurance as your business changes. While not an exhaustive list, here are few situations for when you may consider updating your coverage:
When you upgrade your workspace or location
Whether you own or lease your space, you should be insured for the cost to rebuild and replace all of your assets, so it’s vital that any business insurance policies covering your existing premises are updated accordingly.
When you hire more employees
Most types of business insurance policies include calculations based on the number of employees, so as your business expands and you recruit more staff, you’ll need to increase your employer’s liability protection to ensure there is coverage for everyone that works for you.
If your business experiences financial hardship or the scope of your operation changes, your insurer needs to know. Any changes to your business could affect liability insurance, which could put your company at risk in the event of a claim. If the right amount of liability coverage isn’t in place, this could lead to significant loss to your business or even bankruptcy.
When you change the scope of your business
You should contact your broker regarding updating your business insurance coverage if your business has recently entered a period of transformation that no longer offers the primary service or products covered by your existing policy. Here are some examples of changes that may affect your insurance policy:
- Company name
- Brand and location
- Products or services
- Company function
- Change of management
When you expand your company’s product portfolio
Adding a new product or service means that your company is taking on additional risks. Taking new risks is a reality for business owners, but you need to have the right insurance coverage in place. These product changes can include:
- Introducing a new product line
- Adding new innovative products or services
- Removing previous products
- Purchasing new equipment
- Manufacturing new products
- Adding new computing system
As you introduce new products to the market, it’s important to include these within your insurance, specifically if your insurer requires you to individually insure each product in your catalog. Without adding additional products to your insurance coverage, you may be underinsured and responsible for what otherwise might be a covered loss.
Call DPM Insurance Today
If you revise any of your business offerings, it’s vital your broker and your insurer are informed so that your insurance policy terms can be updated and you are advised you of any additional protection requirements needed.
As your business changes, so should your insurance coverage. Having the right insurance coverage for your business allows you to operate successfully and with peace of mind. To get the right insurance for your business, you contact one of the brokers or CSRS at DPM Insurance Group today. Click here for contact information to all of our six offices across Windsor-Essex and Chatham-Kent.
Every company has different insurance needs, depending on the industry, location and nature of the business. As your business changes throughout the year, your insurance coverage requirements may change as well.