Your Business Has Changed. Has Your Insurance?

When you first opened your business, you probably had a lot on your mind.

Getting customers. Hiring employees. Paying the bills. Buying equipment. Keeping the doors open.

Insurance was probably one of the things you handled because you needed it—and then moved on to the next thing.

But here's something that's easy to overlook:

Your business today may look very different from the business you originally insured.

Maybe you've added employees. Maybe you've purchased equipment, expanded your services, started using company vehicles, or even moved into a larger building.

Your business has changed.

Has your insurance changed with it?

Business Insurance Isn't a "Set It and Forget It" Policy

One of the biggest mistakes a business owner can make is assuming that the insurance policy they purchased a few years ago automatically continues to fit their needs today.

Insurance policies are based on the information available when the policy is written.

If that information changes, your insurance may need to change too.

That doesn't necessarily mean you need more insurance. Sometimes your coverage may need to be adjusted in a different direction.

The important part is making sure the policy reflects the business you're actually running today.

Have You Added Employees?

Hiring employees is a major milestone for a growing business, but it can also change your insurance needs.

Workers' compensation is one obvious consideration, but there may be other questions worth asking.

Are your employees doing the same jobs they were doing when your policy was originally written?

Have their responsibilities expanded?

Are employees driving vehicles for the business?

Are they working at customer locations?

Are you now employing people in positions that didn't exist when you purchased your policy?

A business that started with two employees can look very different after growing to ten, twenty, or more.

What About Your Equipment?

Equipment can represent a significant investment for a business.

Maybe you've purchased:

• New machinery
• Computers and electronics
• Kitchen equipment
• Tools
• Office furniture
• Inventory
• Specialized equipment

If the value of your business property has increased substantially, it's worth making sure your insurance reflects those changes.

The same applies if you've sold equipment, replaced older items, or changed the way you're using your property.

Did You Add a New Service?

This is another one that can be easy to overlook.

Businesses evolve.

A contractor might begin offering a new type of service. A restaurant might add catering. A salon might add additional services. A retailer might begin selling products online.

The business name may be the same, but the actual operation may have changed considerably.

When your services change, your insurance should be reviewed to make sure those new activities are properly accounted for.

Never assume a new service is automatically covered simply because your business already has insurance.

Has Your Payroll Changed?

Payroll is another important piece of the puzzle, particularly when it comes to workers' compensation.

If your business has grown significantly, your payroll may be considerably different from the estimate used when the policy was originally written.

That's one reason workers' compensation policies are subject to payroll audits.

The audit compares the estimated payroll used for the policy with the actual payroll during the policy period.

If your business grew more than expected, you could end up owing additional premium after the audit.

If your business shrank, the opposite may be true.

Keeping your insurance information reasonably up to date can help reduce surprises.

Did You Buy or Add a Vehicle?

Maybe you purchased a work truck.

Maybe you added a trailer.

Maybe an employee started using a vehicle for business purposes.

Maybe your business went from having one vehicle to having a small fleet.

Commercial auto insurance should reflect how your vehicles are actually being used.

The same goes for who is driving them and what they're being used for.

A vehicle used to commute to work isn't necessarily being exposed to the same risks as one used every day to travel between job sites.

Did You Move or Expand?

A new location can be an exciting step for a business.

It can also create new insurance considerations.

A larger building, additional location, different lease agreement, increased inventory, or new equipment can all affect your insurance needs.

Even if you haven't physically moved, expanding into a second location or storing business property somewhere else can be worth discussing.

What Happens If You Don't Update Your Insurance?

This is where reviewing your insurance becomes particularly important.

If your policy doesn't accurately reflect your business, you could discover a problem at the worst possible time—after something goes wrong.

Imagine a business that has doubled its equipment investment since its last insurance review.

Or a contractor who has started taking on substantially different projects.

Or a company that has added several vehicles and employees.

If none of those changes were communicated to the person handling the insurance, the policy may not tell the full story of the business.

Insurance isn't meant to be a snapshot of what your business looked like years ago.

It should reflect what you're doing now.

When Should a Business Owner Review Their Insurance?

You don't necessarily need to wait until renewal.

A review makes sense whenever something significant changes.

Consider reviewing your insurance if you've:

• Added or lost employees
• Experienced a significant payroll change
• Purchased expensive equipment
• Added vehicles
• Started offering new services
• Opened another location
• Moved into a new building
• Significantly increased inventory
• Started working with new types of customers
• Changed how your business operates
• Purchased or sold property
• Taken on larger or different projects

And sometimes, nothing major needs to change at all.

A periodic review can simply confirm that everything still lines up.

Your Business Has Changed. Your Insurance Should Keep Up.

Business owners spend a lot of time thinking about growth.

That's a good thing.

But growth can also change the risks that come with running a business.

The insurance policy that made sense when you opened your doors may not be the policy that makes sense after several years of growth.

That doesn't mean you need to buy every coverage available or increase every limit.

It means your insurance should have a chance to keep pace with the business.

Your business changes. Your insurance should have a chance to change with it.

And sometimes, the most valuable insurance review is simply finding out that what you already have is still the right fit.