If you’re feeling comfy with your business’ current insurance policy despite experiencing rapid growth and success, you might be in for a world of trouble. As a business expands and grows, it’s normal to acquire more resources, equipment, and other assets not that weren’t there when you bought the old policy. In the event of a claim, you may find out too late that your policy won’t be able to cover the claims or you might be even paying for coverages that are no longer useful to you. With that said, here are five signs your business is in dire need of a policy update.
1) You’re Using Up More Office Space
Many entrepreneurs start their businesses in their spare bedrooms or garages. Then they stay in those places until it’s time to recruit someone. Your insurance needs will be considerably different if you’ve recently upgraded to your first actual office location.
You’ll need General Liability Insurance not just to cover your bases in case of equipment damage but also to safeguard your firm from liability when consumers visit you in your new location.
2) You Have a Growing Workforce
There’s a pattern here: as your company expands, you’ll be able to afford to recruit more people. With additional personnel comes a higher level of risk. Your company insurance most likely covers full-time employees. However, the total limit is generally applied to all workers rather than each person (for example, a $2 million restriction applied to all five employees). In most cases, subcontractors are not covered by your insurance coverage. However, if they are found responsible, your company may be implicated in a lawsuit.
3) New Equipment and Hardware
If your company has grown, you’ve probably invested in additional equipment. Your coverage may cover the cost of replacing or repairing this equipment if it breaks down. However, contents insurance and equipment breakdown insurance generally have a limit on the amount of equipment insured, which is why you should notify your broker as your business grows to ensure you have enough coverage.
4) Significant Revenue Growth
Your hard work has paid off, and the company is raking in more revenue than ever. Despite this, your business might suffer unanticipated losses in the blink of an eye. You’ll need Business Income Insurance to safeguard your company if it suffers a property loss due to a covered danger that forces it to close or reduce its operations. This coverage assists you in paying your expenses and provides you with income in the event of an unforeseeable event.
5) Applying for a New Legal Entity Status
Perhaps you switched from being self-employed to employing a small group of people. You may have started as a sole proprietorship, but now is the time to convert to a limited company or corporation. There are several reasons for this, but it may also impact the sort of insurance coverage you require.
If you have three or more employees, for example, you may require workers’ compensation. To protect yourself in the event of a lawsuit, you should enhance your entire firm liability.
It’s a good idea to check your company insurance requirements significantly if you’ve recently grown or changed. The objective is to ensure that your development does not harm you in the long run. To compensate for the changes, we may help you update your insurance and enhance coverage.
Direct-Line is one of Canada’s best commercial insurance brokerages, with the experience and expertise your business needs to grow effectively. To know how we can help, get in touch with us today!