Your business can undergo significant changes even after an insurance underwriter has assessed your risk and worked out a fair price for your coverage. However, if you don’t conduct a commercial insurance review from time to time, you may fail to spot new liabilities incurred due to changes in your business. Some occurrences or developments may increase or decrease your insurance costs and coverage, which is why you should always track major shifts in your business.
Here are six scenarios that may compel you to get your commercial insurance reviewed.
1. Audit Your Commercial Insurance in Case of Significant Revenue Fluctuations
Changes in your business revenue can affect your insurance needs and costs. If your annual sales have grown significantly, your liability has also increased, and your insurance premium should reflect this. Reviewing your policy provides an opportunity to estimate how much more you need to be paying your insurer. Otherwise, you might end up owing your insurer a lot of money.
If your revenue shriveled year-to-year, there’s a possibility that you’ve been paying for coverage you don’t even need. In such a case, you can correct this and improve your cash flow by inviting an insurance agent to audit your policy.
2. The Size of Your Workforce Changed
The size of your workforce determines how much you need to pay in workers’ compensation insurance. Besides, you may need to purchase workers’ comp once you have a specific number of employees, depending on the laws of your state. If you started out with one worker, your insurance needs might change once the number reaches three, four, or five.
With commercial insurance review, you can determine whether you need to purchase a workers’ compensation policy. If your workforce has shrunk or terms of employment have changed, the consequent liabilities have decreased, and so have the coverage needs.
3. Change of Products/Services
Business insurance review is also necessary when you switch to new products/services. The same is true if you stop selling certain types of items. Each unique offering may come with a different set of liabilities and coverage needs that you should address as soon as possible.
For example, if you shifted from selling products “as is” to modifying them, you may be liable for any injuries or claims arising from the changes you made. Auditing any line-of-business dynamics may reveal coverage gaps that require urgent attention.
4. Change of Business Location
Relocating to a new city or state is almost guaranteed to affect your commercial insurance needs. For starters, business insurance requirements differ from state to state.
Besides, insurers often calculate exact premiums based on the neighborhood surrounding your business. If you move to a new place with high crime rates, you may have to start paying higher insurance premiums. In that case, you should consider enlisting an insurance consultant to help determine your new coverage needs and costs.
5. You Made Safety Improvements to Minimize Your Risks
Be sure to review your business insurance policy once you’ve made any safety enhancements in your office or business premises. You probably should pay lower insurance rates after addressing slip, trip, and fall hazards. Better safety gear for your employees minimizes the risk of on-the-job injuries or fatalities, making it an improvement worth documenting for underwriting purposes.
6. New Machinery or Vehicles
Your insurer needs to be aware of any changes in your risk profile, resulting from the acquisition of new or better machinery or tools. For example, adding computers to an office with a theft cover increases your business’ potential losses. This new exposure increases your coverage costs.
Don’t hesitate to review your commercial insurance coverage after your business has undergone any of the above transformations. Would you like to engage an independent insurance agent for help reviewing your commercial insurance policy? If so, then contact the experts at John E. Peakes Insurance Agency. We are ready to assist you with all your coverage needs today.