According to the Insurance Journal, more than 70% of small businesses in the U.S. are underinsured. Frequent changes in the economic environment often result in underinsured businesses to be unaware of the extent of their existing coverage. Hence, companies must conduct a commercial insurance review periodically to ensure their policy is up-to-date with their needs.
Here are a few situations when you should review your commercial insurance policy.
Change in Business Size
Sometimes when a company scales up or down, it’s time to review business insurance. Generally, resizing your business can come in the form of hiring or laying off employees, increasing your supply, and opening new branches, as reported by the Harvard Business School. Whether the size of your workforce or revenue changes, you should make sure your insurance policy is appropriate. Many businesses have had to downsize due to the pandemic induced shutdowns. If your establishment has had to cut staff or reduce room capacity, it could mean paying lower insurance costs. You may also get a reduction in your expenses if your company switched to remote work during COVID-19.
Purchase of New Equipment or Vehicle
Any additions made to your existing equipment must be covered with an increase in your current policy. Expensive equipment requires high maintenance costs. Replacing such equipment if they get stolen or are vandalized can derail your finances. Thus, make sure to have them included in your insurance policy as soon as you possess them. Similarly, vehicles used for company work must be covered by a commercial auto insurance policy, which differs from a personal policy. Every vehicle you add can potentially increase the risk for the driver and the business. Modifications to vehicles must also be reported to your insurer.
Relocation or Change in Services
The amount of risks faced by a business differs from one location to another. Some areas are high-risk compared to others in terms of the frequency of natural disasters and security issues. Usually, insurance companies charge higher insurance costs where high risks are involved. This means, if you relocate your business premises from a low-risk place to a high-risk one, you will need to purchase additional insurance to avoid underinsurance and vice versa. Knowing that your insurance agent can maintain your existing coverage and adjust it according to the changes will give you peace of mind. This is where a commercial insurance review can help your business move forward, even amidst the changes.
Improvements Made to Lower Risks
According to the Whole Building Design Guide (WBDG), as high risks attract high insurance costs, the insurance company can give you a discount if you mitigate some of your potential risks. You can enroll in your insurer’s risk management consulting services to help determine courses of action that would lead to a safer workplace. By improving the workplace, such as fixing floor problems that cause people to trip, you can cut costs on insurance and minimize accidents. Similarly, having a smoke detector and fire extinguisher can lower the risk of fire damage. The more effective your security, the lower the coverage you require. A thorough evaluation of your company’s security protocols and systems will give your agency an idea of how much coverage you need.
A commercial insurance review is an excellent tool for keeping your company financially secure. It will not only identify gaps in coverage but also ensure that all of your company’s weaknesses are promptly addressed and adequately covered. For easy and convenient business insurance services, contact the experts at Artisan Insurance Solutions. We are ready to get you the coverage that you need today.