Cleaning Up Your Business Insurance Policy: Reviewing And Updating Coverage
Congratulations! Your business is expanding and reaching new heights. That’s a cause for celebration. But amidst the excitement, it’s crucial to consider if your current insurance policy is keeping pace with your growth. Just like you wouldn’t wear last year’s clothes this season, your insurance policy shouldn’t be stuck in the past. While contract renewals are a natural time to review your coverage, there’s no need to wait. Especially if your business has undergone significant changes, it’s wise to re-evaluate your insurance protection.
Here at Weed Ross, we understand that every business is unique, and your insurance needs should reflect that. Remember, your insurance policy is a safety net. You don’t want to discover it’s full of holes when disaster strikes. In this article, we’ll cover:
In this article, we’ll cover:
Reassessing Your Businessowners Policy
Most businessowners policies (BOPs) provide a solid foundation of coverage, including property damage, general liability, and business interruption costs. However, as your business grows, so too does its potential exposure. A larger company means more valuable assets to replace in case of damage, and a temporary shutdown due to a covered event can be even more financially disruptive. If your company has doubled in size since you obtained your current BOP, updating your coverage limits is essential to ensure you’re adequately protected.
Upgrading Your Workspace
Whether you own or lease your building, your insurance should cover the cost of rebuilding and replacing its contents. Did you recently renovate your office or expand your workspace? Remember, your policy payout in case of a covered loss is capped at a specific amount. If you’ve significantly upgraded your space, a policy based on your previous setup could leave you with a hefty bill to cover the improvements.
Expanding Your Product Line
Business growth often involves expanding your product offerings. This is fantastic, but it also necessitates a review of your product liability insurance. New products require coverage to protect you from potential legal repercussions if they’re found to be defective. Additionally, ensuring adequate insurance for your new inventory is crucial in case of theft or damage. Leaving new products off your policy could leave you underinsured in the event of a covered loss.
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Fidelity Bonding: Protection Against Fraud
While background checks are a wise precaution for employees handling money and valuables, unexpected situations can arise. Fidelity bonding insurance acts as an additional layer of security, safeguarding your business against employee fraud . If an employee commits theft from the company or clients, a current policy with sufficient coverage ensures you or your clients are reimbursed.
Vehicles Used for Business
Proper coverage for company-owned vehicles is a must. However, a grey area emerges when employees use their personal vehicles for business purposes. Discussing employee vehicle usage with your insurance agent is crucial to ensure the appropriate coverage is in place. Even if employees have coverage under their personal policies, your company could still be held liable in the event of an accident on a business trip.
New Contracts and Evolving Partnerships
Landing new vendors and clients is exciting, but scrutinize the contracts carefully. Sometimes, these agreements require you to carry specific insurance types or higher coverage limits. Professional liability insurance might be a requirement under some contracts, while others may stipulate adding designated individuals to your existing policy.
Director’s and Officer’s (D&O) Insurance
As your company scales and transitions to a board structure with directors and officers, securing D&O insurance becomes essential. This policy protects these individuals from financial repercussions stemming from decisions made on behalf of the company. Attracting qualified individuals to serve on your board becomes significantly easier when they know they’re adequately protected by a company insurance policy . Any changes in key personnel or ownership structure should also prompt a review of your insurance coverage.
Business growth is a journey to be celebrated, but navigating it without proper insurance can be a recipe for disaster. At Weed Ross , we’re here to help you make informed decisions about your insurance needs. By taking the time to regularly review and update your policy, you can ensure your business is well-protected and poised for continued success.?
Still have questions? Contact us today —we’re here, mainly because we love our jobs, but we’re also here to help!