Preparing For Your Annual Business Insurance Policy Review

When you operate a business, proper insurance coverage is crucial to your economic stability. When an unexpected incident occurs, your insurance policies pay for the property, employer, liability, and other exposures that could ruin your finances and put you out of business.

Think of each policy as a key component of a well-thought-out program of protection. Insurance is too important to simply scan your renewal policies and pay the premiums each year just because of a looming expiration date.

It’s a good idea to meet with your agent annually to discuss all of your policies without the pressure of looming renewals or pending claims. It’s the best way to make certain your insurance program sufficiently protects your current business exposures.

Preparing for your annual insurance policy review requires time and effort, but it’s not necessarily complicated. You begin by examining your business situation and documenting recent changes. During your review, you discuss your findings with your agent to determine if coverage upgrades are necessary.

It’s often a matter of revisiting the answers you gave your agent when you first purchased your commercial insurance policies. Much of the information you need is usually included in annual income tax or business financial records.

What Assets Require Protection?

The assets of your growing business change from year to year. Real estate values rise and fall. You buy new machinery or vehicles to keep up with business demands. The changes you undergo during a year may cause a drastic shift in your financial situation.

These changes may also alter the types of insurance you should have in force or increase the required limits. Here are some of the key categories to consider:

• Insured premises – Have you recently remodeled your building? Have you made improvements or added built-in equipment?
• Business Personal Property – Have you purchased new office furnishings or added new office equipment? Have you upgraded your technology?
• Loss of income – How much income will you lose if an insured peril damages your building and puts you out of business temporarily?
• Vehicles – Do you have coverage for your new vehicles and mobile equipment?

What Are Your Potential Liability Exposures?

When you’re in business, minor injuries and damage can lead to lawsuits against your company. Often attorneys take on cases and pursue them regardless of liability.

During your annual insurance review, you should discuss these and other concerns with your agent and make sure you have the right policies to cover your potential exposures.

• Auto accidents – If you have large commercial vehicles, do you have an adequate liability limit to cover a major accident with multiple injuries? Does your insurance comply with the requirements of the states in which your vehicles travel?
• Premises liability – Do you have a high enough limit to cover a serious premises accident?
• Employee injuries – Is your workers’ compensation exposure adequately covered? Do you have any independent contractors who may legally be considered employees?
• Errors and omissions – Do you have any professional or performance exposures that are not covered or excluded by your liability insurance policy?
• Product liability – Do you manufacture, distribute, or sell products? Plaintiffs may sue any company in a chain of distribution.
• Contracts – Do you have any obligations as a contractor or subcontractor to protect and defend another business or their employees?
• Technology – Some technology exposures require technology-specific liability policies.
• Large losses – Do you need an umbrella or excess policy to cover catastrophic claims?

Can You Contribute To Claim Payments?

If your financial situation allows you to assume more responsibility for your first and third-party exposures, you may wish to make policy changes that reduce your premiums.

• Larger deductibles – What’s the most you can afford to pay out-of-pocket if you must make a claim for property or vehicle damage?
• Self-Insured Retention Limits – Can you afford to pay smaller liability claims out of your business assets?
• Eliminate coverage – If your vehicles are older with decreasing values, can you afford to drop the physical damage coverage and insure for liability only?

Commercial insurance policies provide valuable coverages that protect and defend you so you can keep your doors open. When you contact us to schedule your annual business insurance review, you’ll find it’s an important tool to help you make the right insurance choices.