By: Corin Cook on May 8th, 2020
When to Update/Get New Business Insurance
Owning a business takes a lot of work, and getting the right insurance coverage for it doesn’t make it any easier.
If anyone understands, it’s us at Berry Insurance. For one, we are a business, so we ourselves have to make sure we have the insurance we need to be completely protected. On top of that, we also help several businesses ranging in industry and size get the individualized insurance they need every day — it is our job after all.
Depending on your business, you will need a variation of several different types of business insurance, such as general liability, property, workers compensation, commercial auto, professional liability and more.
Sometimes, it might be obvious when you need these new business insurance policies because it is often a prerequisite to completing other business tasks. Other times, it might not be so obvious, but if you don’t switch at the right time, you could have gaps in coverage and be faced with an uncovered claim or audit issue.
Let’s go over all the scenarios that may mean it’s time to shop for business insurance.
Before you open a business:
Obviously, before you open your business to any clients, you’ll want to make sure you’re insured.
There are a lot of risks to running a business, and there’s really nothing like a large out-of-pocket expense or a lawsuit to start your business off on the wrong foot.
Changes in operations:
If something changes about the way you operate your business, such as the services you provide or the products you sell, you might need to make changes to your insurance policies.
Having more products or services means you likely have new equipment or inventory you need covered.
You may also need to adjust your limits if the risks associated with your operational changes have altered.
Changes in staffing/payroll levels:
Your insurance carrier likely uses your staffing and payroll levels to determine both your limits and your premium on certain types of business insurance.
If your staffing or payroll levels change, it may be time to shop for insurance.
In some cases, it may be sufficient to just adjust the limits on your current policies.
Check with your insurance agent to see what is the best option for you.
Changes in revenues:
Similar to payroll and staffing levels, revenues also play a role in determining your insurance limits and premiums.
If your business’ revenue changes, your insurance policy also needs to change, whether it be through updates to your current policies, or a new one.
Changes in ownership/business structure:
Sometimes, when there are changes in the ownership of a business, the current commercial insurance policies will simply need to be updated, but if the change involves a shift to a different organization type, you might need a whole new policy altogether.
For example, if your business is transitioning from a partnership to a corporation, or if it involves a merger with another organization, you will almost certainly need a new policy because so many factors will change.
If you have any territory changes, such as moving, or beginning to offer services in new states, you will need to change your insurance policy.
Expanding offerings comes with additional risks and every state has different laws and insurance requirements, so you’ll need to make sure your insurance is up to par.
New contracts = new risks.
If you have new partnerships, you probably need more covered. Some partners might even require you to have certain insurance limits to ensure they are protected.
When you’ve had an uncovered claim:
If you’ve had an uncovered claim, that is usually a sign your insurance isn’t adequate.
It could mean your limits are too low, or you are missing coverage or a seperate type of insurance and it’s probably time for a new policy.
When you aren’t getting adequate service:
Nothing is worse than the headache of poor service.
If you feel like you aren’t being properly supported or treated by your insurance company, it might make sense to start shopping for a new policy.
When your premium has increased significantly:
Annual increases in premiums are common in the insurance world, but if your premium has unjustifiable increased significantly, there might be better options out there for you.
Renew your insurance, even if nothing changes:
If you do not have a need to shop for new business insurance mid-term, you will still need to renew your policies every once in a while.
Typically, business insurance policies will last one year until you have to renew.
But don’t worry — If you are insured with us, we will reach out to check if anything changed for your business and renew your policy for you.
As you can see from the content above, there is a lot that goes into business insurance. With all these concerns, you might be wondering if a small agent is actually a good fit for you.. We answer all that and more in this article to help you find out if Berry is right for your business needs.