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How Often Should You Re-Evaluate Your Business Insurance Coverage?

Business insurance is essential for safeguarding and expanding your business. Even when mistakes and mishaps happen, it helps the firm survive and can be advantageous during difficult times. However, as your company grows, you should periodically assess your current insurance to see if it sufficiently protects your operations. Contract renewal time is a good time to do this, but you can do so at any time and are especially encouraged to do so if you’ve encountered significant changes.

Here are some reasons to make changes to your existing insurance policy:

  1. Your Company Is Growing

    As your business grows, so will your revenue. Some general liability insurance’s base their premiums on revenue, which means it becomes very important to audit your revenue annually. A growing business is also a sign that your business is more valuable and therefore has more to lose. In a litigious society, this could mean any injury or accident on your business premises could result in legal action. Protection against any possible crisis is essential for the long-term survival of your business.

  2. Introducing a New Product or Service Line

    While your business may have extended the range of its goods or services, it continues to be imperative to have corresponding product liability insurance in case they turn out to be defective. Additionally, you will also require insurance to safeguard your investment in the event that your products are stolen. If you don’t include them in your insurance policy, you risk being underinsured and liable for a loss that would otherwise be covered.

  3. Getting into New Contracts

    Although signing new contracts with new customers and suppliers might be exciting, they occasionally come with requirements for sufficient insurance. You could be required by some contracts to maintain a particular level or type of insurance, such as professional liability insurance. Others can demand that you add someone to your policy.

  4. Hiring New People

    It’s critical to get the insurance that covers both you and your support staff in case of an emergency. For instance, you might need to have workers’ compensation insurance depending on whether you hire independent contractors or actual employees. Even if you only have one employee, workers’ compensation insurance is typically required. You might also need to review your general liability insurance if you believe that utilizing independent contractors is the best course of action.

  5. Key Personnel

    A company’s corporate structure may alter as it expands due to the additional business. Additional coverage might be needed if top-level management is hired. For instance, getting insurance to safeguard against the decisions they make on the company’s behalf is a crucial step. This is a common hiring criterion among senior managers. You should review your insurance if you change the ownership structure or bring on important people.

  6. Vehicles for Company Use

    Vehicles may be necessary for your business for several reasons. It’s crucial to have adequate coverage for any vehicles your business owns or uses. Even if employees use their own automobiles for business-related road trips, you could need insurance. Consult with an insurance agent on how you can get the best policy based on how your workers utilize their automobiles for business.

Consult with McCarty Insurance to Evaluate Your Business Insurance Coverage

Although the requirements of each business vary, an insurance professional can walk you through your options. Remember that your insurance coverage should be equal to the value of your business. You don’t want to have inadequate insurance, which would leave your losses uninsured. For any questions you might have about business insurance, contact us at McCarty Insurance today. Our team will be happy to create a customized quote for all your needs.

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