15 May 2023
If you’re a small business owner with comprehensive insurance coverage, you already know the importance of protecting your assets. You may have invested a lot of time and effort into finding the best policies for your business. If so, you’re off to a great start — but don’t take insurance off your annual to-do list.
Your business is likely to evolve, so it’s critical that you review your insurance coverage regularly. A good rule of thumb is to reassess your coverage annually or whenever there’s a change to your business. How will you know when the time is right?
Consult this Simply Business insurance review guide to make it easier for you to know when and how to review your insurance coverage. Let’s get to it!
As a business owner with a lot on your plate, reviewing business insurance may be the last thing on your mind. It may be tempting to simply renew your existing insurance policies, but doing so may put your business at risk.
Think about the day you launched your business. Now think about what your business looks like today. If your business has grown or changed, there’s a good chance your insurance coverage needs a second look. A careful review of your policies may reveal that you’re underinsured or paying for coverage you no longer need.
Here’s what may happen if you don’t re-evaluate your business insurance coverage:
Business insurance requirements change for many reasons. That’s why at least a yearly review of your policies is so important. It allows you to evaluate your business and consider changes that may affect your insurance needs.
At Simply Business®, our insurance agents send you an annual renewal meant to help you review your coverage and determine if the policy is still suitable for your business. A yearly review can confirm if you have adequate business insurance coverage and will help you determine if there are policies you no longer need.
You may not be thinking about insurance day and night, but we are. We’ll help you evaluate whether you have the insurance coverage you need to protect your small business.
Like many small business owners, you may be overwhelmed by paperwork. So the first step to learning how to review an insurance policy is finding your policies! Once you locate your documents, make sure they’re always within reach. When your insurance policies are organized and easily accessible, you may be more likely to periodically review them.
Next, think about how your business has evolved over the past year. To help you get started, below is a list of changes that may signal it’s time to review your insurance coverage:
A new business location can trigger the need for changes to your insurance policies. Whether moving to a larger space, opening an additional location, or transitioning from a home office to a commercial space, you should revisit your general liability insurance policy.
Moving to a new location doesn’t automatically mean your insurance rates will increase. Depending on the new space's size, location, and safety features, you may be eligible for a rate reduction. Regardless, it’s crucial to review your policy to make sure your new location is properly covered and that your insurance company has your correct mailing address.
Did you hire your first employee this year? You’ll want to ensure you’re meeting your state’s workers’ compensation insurance requirements.
Every state has its unique rules regarding workers’ comp, and most require business owners to purchase coverage as soon as the first employee is hired. Your state's recent workers’ compensation requirements can be found by checking out our state-based insurance hub.
If you already have employees and workers’ compensation insurance, you should regularly review your insurance coverage. The number of eligible employees you have could impact how much coverage you’ll need.
What if an employee leaves your company? That’s another time to revisit your policy. That way, you aren’t paying for staff members who are no longer with your company. Don't worry too much though: if you don't revisit your policy it will get adjusted at the end of your policy term by your carrier.
From computers to tools to kitchen appliances, acquiring new equipment for your business can be exciting. While you’re learning how to use it and figuring out where to put it, don’t forget to account for new equipment when reviewing your insurance coverage.
Look at it this way — a new addition to your business means you have something extra to protect. A significant purchase may change your business assets' value, which could impact your annual premium. So be sure to check with your insurance agent after large purchases to see if you need to update your coverage.
Any change to your organizational structure should make you question if this is a good time to review your insurance coverage.
Whenever your business expands, changes, or progresses, you should take a fresh look at your company's risks and re-evaluate your insurance needs.
If you’ve reorganized from a sole proprietorship to a corporation or your business acquires another business, that’s a sign that you may have different needs and require a new insurance policy.
There are other ways your business operations may shift. For example, if you’ve recently expanded into e-commerce, you may have changed how you're storing customer data. Did you know digital information, such as customers’ personal and payment information, is stolen more commonly than physical property?
It may be time to add cyber liability insurance to your existing coverage. Cyber insurance helps cover the costs of claims associated with stolen customer data, cyberattacks, breaches, and fraud.
Think about the products or services you offer and if they have changed in nature or scope. If so, make sure you have the appropriate coverage to help cover the costs associated with third party claims made against your business relating to your new products and/or services..
If your business sells products, you should revisit your product liability insurance to ensure you have the protection you need. Adding another product to your product line means you may be introducing new risks.
Do you provide professional services? If so, you may have professional liability insurance. This type of insurance is designed to protect service professionals — such as accountants, architects, and real estate agents — who can be sued by customers for an alleged mistake or failure to act.
Adding a new service to your business should signal a time to revisit your policy. Here’s why:
Let’s say you’re a salon owner. You recently obtained your esthetician license and added three more treatments to your service menu. One of your clients gets a chemical peel and has a bad reaction from it. Her skin is so irritated that she may have permanent scarring. She decides to sue you for negligence.
Unfortunately, you didn’t increase your professional liability coverage, and your new spa services are not listed on your policy. Ouch! That means you will be on the hook for your client’s medical bills and expensive legal fees.
You can’t always avoid mistakes in business. But you can protect yourself by having the proper insurance for your business’ needs. That’s why it’s critical that you review your business insurance whenever you sell a new product or offer a new service.
Business insurance reviews are an essential part of running a small business.
As a small business owner, you probably wonder, “When was the last time I reviewed my coverage?” Don’t let that question send you into a panic.
Instead of worrying about it, commit to setting up a review with these questions in mind:
It can be easy to forget about your insurance coverage when you’re focused on the many other aspects of your business. However, reviewing your policies may go a long way in helping your business thrive.
What if an employee leaves your company? That’s another time to revisit your policy. Your workers’ comp insurance coverage also will be adjusted if an employee stops working for you. That way, you aren’t paying for staff members who are no longer with your company.
If you have employees — whether part-time or full-time — there’s a good chance you need workers’ comp coverage, and the insurance renewal process is an excellent way to check that your coverage satisfies your business’ needs.
The good news is that you don’t have to tackle an insurance coverage review alone. When you talk to an insurance agent at Simply Business, you’ll have the support of a licensed professional who understands the needs of small business owners like you.
Your business may change over time, and we get that. Our agents will help you assess your business and its unique needs. Whatever you need to keep your business up and running — like increased coverage or a change in your policy — we’re here to guide you. We know you don’t have much time to deal with insurance policies, so we’ll make it easy for you.
Ready to start reviewing your coverage today? Talk to one of our licensed insurance agents by calling 844-654-7272. One call and you can enjoy peace of mind, knowing that you have insurance in place to help protect your business.
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As a business owner, it’s critical that your company always has comprehensive insurance protection.
Reviewing policies may not be the most exciting part of your day, but it’s essential to your business. Once you’ve tackled your first insurance coverage review, you’ll be a pro at making it an annual “to-do” event.
I've always loved to write and have been lucky enough to make a career out of it. After many years in the corporate advertising world, I'm now a freelance writer—running my own show and contributing to Simply Business. Fun fact: I have three desks in my house, but I still do my best thinking walking in the woods.
Susan writes on a number of topics such as workplace safety, customer sales, and workers' compensation insurance.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.