When Should You Update Your Business Insurance Policy?
Through time, businesses evolve and change, whether it’s because of growth or as a way of adapting to the economical landscape. But what does this mean for the business’s insurance policy?
If you have experienced setting up business insurance in the past, you may remember that the whole process typically starts with the insurance provider asking a number of questions to get to know your business as best as possible. Once this is done, you are given a quote, the premium is negotiated, and the insurance policy is eventually finalized.
In extension, this means that major changes to your business call for updates to your business insurance policy. In this article, we will discuss everything you need to know about when to update your business insurance policy and why.
Why You Need To Update Your Business Insurance Policy
Different businesses face different risks. As such, you may have a number of insurance policies bundled together to fully protect your business.
For instance, you may have commercial general liability (CGL) insurance to protect you from massive financial loss if your business is liable for third-party injury, property damage, or reputational/advertising damage. This is arguably the most important type of insurance to have.
You may also have commercial property insurance to safeguard your brick and mortar workplace. As for your commercial vehicles, you may have commercial auto insurance. For your construction equipment, you may have construction equipment insurance. And for your employees, you may have set up workers’ compensation insurance.
All in all, it is important to remember that for all types of business insurance, the coverage has to match the value of the business, the operations, and the risks you might be facing.
Instead of updating your business insurance only when the policy is about to expire, it is advisable that you make updates when major changes to your business occur. Doing so ensures that you have appropriate coverage at all times.
Changes That Mean Your Business Insurance Is Due For an Update
1. Adding or Replacing Employees
When you make changes to your employee line-up, the most evidently impacted type of business insurance would be the workers’ compensation insurance policy. However, this kind of change can also affect other types of insurance – such as your CGL insurance and commercial auto insurance (or fleet insurance).
For CGL, an increase in the number of employees also increases the risk faced by your business, which is why the insurance provider needs to know about such a change.
As for commercial auto insurance or fleet insurance, the employees who are given access to the vehicles need to be declared because their driving record would be assessed.
In both cases, it’s a matter of being clear about risk factors. When insurance providers are made aware of new risk factors in a timely way, it places businesses in a better position to have the coverage they need and to have their claims approved more seamlessly.
2. Having Your Commercial Space Renovated
The commercial space of a business, whether it’s an office, store, or storage space is an important factor to consider in nearly all business insurance types. However, when it comes to changes to the commercial space, the most affected types of business insurance are CGL insurance and commercial property insurance.
For both of these insurance types, the larger the premises (or the more square footage you have), the more risks there are – whether it’s in the form of injury within the premises or commercial property damage. The more risks there are, the more adequate coverage is needed.
But aside from the size or expansion of the property, the nature of the renovation is also considered. In some cases, renovations that fortify the property or repair old parts of the property can reduce potential risk and this could potentially lower the premium.
3. Adding or Replacing New Vehicles
For changes concerning commercial vehicles, commercial auto insurance and fleet insurance are the most affected types of business insurance. New kinds of vehicles or added vehicles would mean that coverage would need to be adjusted accordingly.
If you have individual commercial auto insurance, new vehicles would need their own policy set up. However, if you have fleet insurance (which is designed to be more seamless when insuring multiple vehicles), it’s only a matter of updating that policy.
4. Getting Equipment/Technological Upgrades
Getting upgrades for your equipment can affect two types of insurance. If it’s an upgrade concerning office equipment, this would affect your commercial property insurance. This is because commercial property insurance typically extends to the office equipment within the premises.
However, if you are upgrading construction machinery, then your construction equipment insurance policy is the one that needs to be updated.
In both cases, it’s a matter of declaring the value of the upgraded equipment so that they have proper coverage.
5. Offering New Products or Services
Having new products or services is a major change that can impact multiple types of business insurance policies, depending on the circumstances. The risks surrounding new business operations may require additional coverage from your CGL, commercial property insurance, and workers’ compensation insurance.
In more specific scenarios, such as when vehicles are required to take more risky routes because of the new operations, this may also impact your commercial auto insurance.
Get The Hassle-Free Business Insurance You’ve Always Wanted
As a business owner, there are a number of things that you worry about every day. We’re here to tell you that business insurance need not be on your worry list any longer.
Contractors Insurance is an award-winning insurance brokerage firm based in Ontario. Through our years of service, we’ve aimed to make insurance as hassle-free as possible for our clients.
When you bring your business to us, insurance updates, along with a number of other insurance concerns and questions, are all just a phone call away. Our dedicated team will always have your back, thereby giving you more time to focus on your day-to-day operations.BACK TO ALL ARTICLES