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7 Crucial Times to Re-evaluate Your Business Insurance Needs

Did you check “get business insurance” off your to-do list and never look back? Protecting your assets with the right coverage is an important part of opening or launching your business, but it shouldn’t be a set-it-and-forget-it action item.

As your business expands, changes, and progresses you will want to take a fresh look at the risks your company faces and re-evaluate your insurance needs.

You May Need to Re-evaluate Your Business Insurance Needs If...

Here are seven times you’ll benefit from taking a fresh look at your coverage.

1. Your Business is Growing

The best time to take a look at your insurance coverage is when things are trending upwards for your business.

Smiling Business Owner

The more value your business has, the more you have to lose. Unfortunately, we live in a litigious society and many people wouldn’t hesitate to take you to court if they feel they are injured in some capacity because of your business operations. Whether that’s a physical injury or even an advertising injury, one small incident could cost you.

If you have been seeing the payoff from long hours, hard work, and creative risk-taking in the form of increased profits and an increased cash flow, you may want to rethink the amount of coverage you have on hand. Is it enough to protect what you’ve worked for?

2. Your Business is Slowing

Not every business is booming at all times. You may find that you experience slower seasons or periods where profits are lower than expected. If you need to free up some extra cash flow in order to keep the lights on and inventory on the shelves, it’s definitely time to rethink your business policies.

That doesn’t mean cutting out coverage entirely, however.

Letting policies lapse or canceling coverage during a slow season could actually cost you more in the long run.

There are changes you could make to your insurance policies that may free up some much needed cash without leaving you vulnerable to unexpected incidents. You may want to increase your deductible amounts to lower your monthly premiums, for example. Or you and your insurance agent may find a creative way to combine policies to get a discounted rate.

3. You’re Adding New Services or Products

Thinking of adding a repair service to your retail shop or private labeling a product to sell on your ecommerce store? New services or products could bring in new streams of revenue for your business… but they can also bring additional risks.

Hipsters Evaluating Coffee Beans

Adding a private label product to your online store brings new risks such as product liability exposure, intellectual property rights considerations, and a responsibility for product recalls.

Adding a repair service to your retail shop means you’re handling customer property, which could lead to third-party property damage concerns or safety concerns for employees who will be working with potentially dangerous tools and equipment in your store.

Expanding your business with new revenue streams is a great idea, but make sure your insurance covers you against the unique risks those new products or services will bring.

4. You’re Hiring

When you first started your business, you may have been a one-woman show. Web designer, graphic designer, marketer, copywriter, accountant, warehouse manager, filing clerk, customer service department… you’ve played all the roles. But when it’s time to hire help, you’ll want to consider more than just what wage to pay.

Depending on whether you hire an independent contractor or an actual employee, you may need to carry workers’ comp insurance. In most states, workers’ comp is required, even if you only have one employee.

And if you decide independent contractors are a better fit, you may need to take another look at your general liability policy. Because you may still be liable for the actions that a contractor takes when they’re doing work for your business.

If you’re bringing in helping hands, it’s always a good idea to talk to your business insurance professional to ensure you have the right coverage in place.

5. Your Coverage is Cookie Cutter

We’re not trying to butter you up: your business is unique. So why would you carry insurance coverage that’s not custom-made to address your specific industry needs?

Afterall, a small local bakery won’t face the same risks as a food truck owner.

Your insurance should be tailored to match the exact risks you face every day as you do business.

Happy Business Owner

6. You’re Spending Too Much

Are you cringing every time you make a premium payment for your insurance coverage? Maybe you’re spending too much! If you are, we’ve got good news.

There are ways to save money on your insurance policies.

We’ve already mentioned increasing your deductible amounts to save on your monthly premiums. But if you like your deductible amounts right where they are, here are some other options:

  • Avoid small claims. Pay out of pocket for the little incidents you can afford.
  • Keep your policies up to date.
  • Combine multiple policies to get lower rates.

Ask your insurance professional how to get lower rates on your small business policies, and you’ll be happy you took the time to reevaluate your options.

7. You Can’t Remember the Last Time You Updated Your Coverage

Here’s the biggest red flag that it’s time to pick up the phone and call your insurance agent to discuss your business coverage:

You can’t remember the last time you did it.

Things change.

Your business may be experiencing growth or a slower season. You may have hired, fired, or changed an employee’s status. You may have bought, sold, or leased a vehicle. You may have moved locations, added services, or changed your product offerings.

Consider a checkup of your business insurance coverage a necessary appointment for the health and wellbeing of the business you’ve worked so hard on. The best case scenario is you fine-tune your coverage and look for options to save money on your premiums.

Best of all, there’s no worst-case scenario to making sure you have the right insurance in place to protect the business you love.


Smiling Business Woman



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