A healthy business, like a healthy body, still needs a checkup every once in a while. Next time you examine your business, complete an insurance checkup as well.
Just as your business grows, so should your protection for it. If your policy doesn't adapt to your changing business, you could find yourself without coverage when you need it the most. From home businesses to startups to large companies, every company needs its own customized protection.
Whatever the size your business, you need to cover it for potential obstacles you might face.
Below, we've listed three signs that your company's size or services may have exceeded its insurance needs, along with what you can do to help restore the right insurance protection. Have any of these things changed since the last time you checked your policy? If so, you may need to update your coverage:
You added employees
Any changes depend on the scale of your business. For example, if in the last year you took your home business to the next level by hiring two employees, your insurance needs will differ from a mid-sized company that just hired 20.
If you have a home business and you've previously relied on your home insurance or a homeowners policy endorsement to protect your business interests, it's time to upgrade. As soon as you add full-time employees, you also must increase your liability protection.
An in-home business policy provides more comprehensive protection for some products and services that the company offers. You must have fewer than three full-time workers to qualify.
If your business employs more than three but fewer than 100 workers, you'll need a Business Owners' Policy or BOP, which has more expansive coverage for business property, equipment, loss of income, and liability. You'll also probably need to purchase workers compensation, health insurance, and disability insurance; a BOP doesn't include these necessary types of protection.
With a larger business, you could consider adding on extra coverage for liability that can better protect you against lawsuits. Contact your insurer about adding coverage for employment practices, retirement and benefits, or umbrella liability.
You added transport or delivery services
Adding transport is a little less complicated than adding employees. If your company purchased a company car or started using delivery trucks or other methods of transport, you need to cover every vehicle with commercial auto insurance.
Why? If your personal insurer finds out you were using the vehicle for commercial use when you or your employee crashed, it could (and probably will) deny your claim.
You expanded your services and/or your client base
Has your home business expanded its client base? If that means that more deliverymen or clients enter your property every day, you need to protect yourself with additional slip and fall liability. Your homeowners policy endorsement isn't available for home business owners with many on-site clients. For coverage, purchase an in-home business insurance policy instead.
If your business is a little bigger, your expanded services might mean extra risk for you. In that case, you could purchase a Business Owners' Policy. Any size business also can add umbrella liability coverage for the highest amount of liability protection.
The bottom line
A healthy business needs a healthy insurance policy to protect it. You should regularly complete a business inventory – a list of all equipment, valuable items, and business property – to better assess your coverage needs.
Make sure the coverage you have matches the growth pattern of your business so you don't get caught in a lawsuit or other pickle when something goes awry. Then you can rest easy knowing your business is covered – doctor's orders.
This article was contribute by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog.