The arrival of January discovers that many small business owners are coming from the busiest season of the year. In the midst of the hustle and bustle, it can be easy to overlook important changes that may have occurred with your business that need to be reported on your insurance. Prioritizing your annual insurance renewal is a great opportunity to consult with your independent agent and review any changes in your business to ensure you are properly protected for the coming year.
Here are some things to keep in mind when preparing for your annual policy check:
As your business grows and thrives, you will likely have new exposures to review and consider covering. These may include:
- New places
- New buildings or facilities are added to existing or new locations
- New vehicles or drivers
- New equipment that must be covered
- New products are manufactured / sold. This is crucial because it can change the basis of your overall responsibility.
In addition to new exposures, you want to review everything about your existing policy, as well as changes in your overall business that may affect your coverage needs. These may include:
- Vehicles sold
- Equipment sold
- Places sold
- Reduction of inventory
- Reduced sales
- Given the current high inflation, your building and / or personal property limits may need to be raised.
As your business grows, you should consider purchasing additional coverage to protect your business. These can cover things like:
- Equipment breakdown (especially important if you are a manufacturing / processing company)
- Crimes, including money and securities, employee theft (including Employee Retirement Income Security Act), counterfeiting and / or computer fraud
- Responsibility for employment practice
- Cyber coverage
- Blank personal property (if you now have several places)
- Building ordinance or law
- Business income from dependent properties
- Power outages outside the premises
- Rented Auto Physical Damage
Drop or reduce coverage
There are other situations where it may make financial sense to reduce your coverage or choose to self-insure certain exposures. Some examples:
- Extensive and collision on vehicles over 10 years old.
- Reduction in the value of scheduled contractors’ equipment covered at fair cash value.
- If you own an older building and would not replace it with an equally large building in the event of a total loss, you may want to consider insuring it on the basis of a functional replacement cost.
- Higher deductible on your property and car.
- Add a property deduction guild to your general liability.
- If you are comfortable with your financial reserves and loss control measures, you may want to consider self-insuring some of your exposures.
This checklist gives a good start when considering your insurance exposures, but the best way to determine your company’s unique needs is to review your coverage with your agent.
From all of us at Central, we wish you a productive and profitable year!
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* The information above is of a general nature and your policy and coverage provided may differ from the examples provided. Please read your entire policy to determine your actual coverage.