Annual Business Insurance Checkup: Make Sure You Have The Proper Coverage

Posted on Dec 22, 2021

Reviewing your business insurance during an annual checkup is important for ensuring your business is successful and you aren’t missing any coverage. Depending on how your business may have changed or grown since your last review, you should consider examining your policies to see if they still meet your needs. The last thing you want is for your successful, expanding business to be met with coverage gaps when you need it most.

Changes to your business that come naturally with its evolution and growth may expose you to new risks that your existing insurance policy may not cover. For instance, what started as a local storefront business with a couple of employees, may have turned into an online store with multiple delivery drivers. To ensure that you are not exposed to any uncovered risks, it’s vital that you conduct an annual business insurance checkup to make sure your insurance policy matches your needs.

Here are some questions to bring up with your independent insurance agent to make sure that your business is appropriately covered:

General Business Information

Has your business name changed?
Has the location of your business changed?
Has the mailing address of your business changed?
Have you added new locations, expanded into new states or outside of the United States?
Have you started selling your products or services online?
Has your business’s ownership been restructured (for example, has your business changed from a sole proprietorship to a corporation or LLC)? Or, have you been restricted to DBAs (doing business as)?
Has your business changed owners, partners, or officers?
Have your business operations changed?
Do you now also service the products you sell?
Have you changed or expanded the types of products you sell and/or services you offer?
Do you have old equipment?
Have you purchased new equipment?

If you answered “yes” to any of these questions, you might need to add general liability coverage, professional liability coverage, umbrella or excess liability coverage, product recall liability coverage, cyber insurance coverage, employment practices liability coverage, pollution liability coverage, crime coverage, and/or property coverage.

Business Property

While owning the property where your business definitely has its advantages, it can also expose you to risk if you don’t have the necessary coverage to keep you protected.

Do you own the building where your business is located?
Have you taken steps to protect your building, like installing fire alarms, security cameras, etc.?
Have you entered into any new lease or purchase agreements for your business property?
Have you reviewed the amount of insurance you provided for your building in the last year?

If you answer “yes” to any of these questions, you may need to add coverage, including property coverage and general liability coverage.

Even if you don’t own the building, your lease may obligate you to maintain certain coverages for the landlord’s benefits as well as yours. Your independent insurance agent can review the insurance section of the lease to advise you appropriately.

Internet

More and more businesses are moving online in the face of the pandemic and because many people find online business more convenient and easy than driving to a store. If your business has moved online, you may want to ask yourself the following questions:

Do you have a website?
Do you sell your products and/or services online?
Are you covered for viruses, hacks, and data breaches?

Consider adding or increasing your coverage for general liability, cyber liability, and data breach coverage.

Vehicles

Vehicles are an essential part of many businesses, especially businesses where any delivery or transportation of goods is involved. Answering “yes” to any of the following questions means you may need to add or increase coverage on your commercial auto policy and excess liability or umbrella coverage.

Have you added or removed any vehicles used for business operations?
Has the way you use your vehicles for business operations changed?
Do you or any of your employees use your personal vehicle or their own personal vehicle for business?
Do you have any new drivers that should be added to your policy?
Has it been longer than 12 months since you reviewed the limits of liability provided by your policy?
Has it been longer than 12 months since you reviewed the deductible(s) required by your policy?

Employees

While employees are a necessary part of every business, they can expose your business to new risks. So, if you answer yes to any of the questions below, consider updating worker’s compensation and employment practices liability coverage.

Have you hired new employees?
Do you have remote workers?
Has your payroll changed?

International Business

If you answer yes to any of the questions below, you’ll likely want to update your insurance policy to include international coverage.

Does your business have international customers or clients?
Do you have employees traveling overseas for your business?
Do you import resources from other countries for your business?
Do you have a foreign manufacturing facility?

Food for Thought for an Annual Business Insurance Checkup

In the end, an annual business checkup is as important for your business as an annual physical checkup is for your body and health. We don’t avoid getting checkups with the doctor because we think our bodies are doing fine. Instead, we go to the doctor so they can tell us how we can improve our health and prevent any future damage that may occur from weaknesses in our health and bodies (like high cholesterol).

Once we know how we can improve and protect our bodies, we are more equipped to make good decisions and actively avoid any activities or food that may expose us to health-related risks.

So, just as an annual physical checkup is vital to the health of your body, an annual business insurance checkup is essential to the health and success of your business. So speak to your independent insurance agent at Otterstedt every year so you can make sure that you and your insurance are properly protecting your business.