Business insurance is a necessity for every business owner. It is a practical and prudent way to ensure the business is protected from harm. Unexpected events can cost the business money if it becomes involved in a lawsuit or experiences a property loss. Often, business owners will purchase an insurance policy when they first start their business and do not give it a second thought after that time. However, that is foolhardy. Responsible business owners review their policies at least once a year. As the calendar turns to January, it is the perfect time to dust off that old insurance policy and give it a good once-over. Following are five reasons to review your business insurance policy needs for the New Year.
1. Conditions change
Businesses do not stay static. They are constantly changing with the industry and the needs of their clients. Even though change is expected for a business, it can often happen suddenly and without notice. The changes that occur can create new situations that are not covered under an old insurance policy. These gaps can create problems that are potentially costly for a business if they are caught without adequate coverage. An annual review of the business insurance policy will help catch any gaps that were created by a recent change in status.
2. You may be overpaying
Just as some conditions change and create gaps that need to be covered, other changes occur that cause business insurance coverage to be too excessive. When policies go unchecked, it is easy for a business to continue paying for coverage that is not needed. Over time, this can cost businesses untold amounts of money. This lost money can be deadly to a small business that must watch every penny it spends. Although it is not as dire for a large company that has an easier time absorbing its losses, no business wants to be in a position of spending money unnecessarily. Taking the time at the beginning of the year to review your business insurance policy will help to ensure money is not being wasted.
3. Worker’s compensation coverage
Many states require business owners to carry worker’s compensation coverage once they have a particular number of employees working for the organization. However, smaller companies might not be bound to that same requirement. Since the size of companies can often change quickly and dramatically, it is important to have an annual review of insurance coverage to verify the company is covered within the requirements of the law. A company that reaches the number of employees for which worker’s compensation coverage is required can get into trouble for not having the appropriate coverage. Also, companies that have downsized and no longer meet the requirement can drop this coverage and are able to lower their premium in the process.
4. You May Catch Mistakes
Insurance agents are professionals, and they work hard at being accurate in all of their computations and in the information they provide to their customers. However, they are also humans and can make mistakes. Unfortunately, mistakes can cost their clients thousands of dollars or more. Any mistakes that appear on a business’ insurance policy can be harmful and costly, so they need to be found as soon as possible. Reviewing your business insurance annually will provide you with the opportunity to catch mistakes before they become major problems.
5. You may be able to get lower rates
Saving money is important to any business owner. One way to cut costs is to shave money off of your insurance premium. Performing an annual review can bring light to several areas where money can be saved. After you review your policy, take some extra time and compare your rate with rates you can get from other companies. The extra time you spend can pay off by finding comparable coverage at a lesser rate with another company. This is also the time to consider bundling your insurance policies. It is possible to save money on your policy if you combine your business insurance with other policies you also carry. Also, insurance companies often offer discounts for various reasons. Performing an annual review of your business insurance policy gives you the opportunity to check for any discounts for which you are eligible.
Business owners should look at the beginning of the calendar year as a time of renewal. It is the perfect time of year to review your business insurance policy and make any changes that need to be made for the betterment of your company. If you have questions about reviewing your business insurance policy, a local insurance agency can help you.
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