Businesses can use commercial insurance in multiple ways to build a safety net that helps ensure its survival in a crisis. The fact that plans can be customized for any business to fit its uniqueness should help entrepreneurs feel more confident about risk management. Here are some reasons for a commercial insurance review from time to time if you need to make modifications to your plan.
When Business Income Changes
A common reason to review commercial insurance is when a business grows or shrinks significantly in revenue. This change can affect your premium, as lower-income indicates you would likely pay a lower premium. If your income increases, it could mean paying a higher premium and owing extra money for the period when the numbers rose.
The same dynamic is applicable when your company changes in workforce size. A company that adds more employees will need to pay a higher insurance premium.
Moving to a New Location
When your company relocates, you will need to review business insurance and make sure it is updated. One of the critical factors to insurance rates is location, so if your business moves to an area with a higher crime rate, it will likely raise the premium. Meanwhile, moving across the street from a fire station can help lower insurance costs. Additionally, your insurance needs alter when you shut down operations at a site.
Introducing New Products or Services
Another reason for a business insurance review is when your company introduces a new product or service, affecting risks. Switching your business model to include different types of products or services certainly requires talking with your insurance agent to determine if different types of coverage should be considered.
Adding New Vehicles to Your Fleet
Insurance companies treat company vehicles differently from personal cars because there are more risks involved in such vehicles. Using various vehicles and drivers calls for customization, so when you alter your fleet, it is time to review your policy as well. Any vehicles used for your business must be disclosed to the insurer and covered by commercial insurance. You should also notify your agent if you have any of your vehicles modified, which could affect vehicle class status.
Investing in New Equipment
Any time you invest in new equipment for your business, you are at risk of hoping the investment will generate a financial return. Renovating your office space can also be a risky investment. Taking a chance to modernize your business to increase digital operations can be both expensive and challenging. Sometimes it takes borrowing money to make these moves happen, which increases financial risks. These changes require contacting your insurer to see if extra coverage is needed.
Reduction of Risks
Every business has its own unique risks, which is why it helps periodically to discuss any changes to your company with your insurer. Many companies start with just General Business Insurance. Then as they evolve, they add different types of supplemental coverage.
The more your company can lower its risks, the more likely you will be able to reduce insurance costs, particularly for liability. So if your business switches from a brick-and-mortar establishment to operating exclusively as an online service, you will not have to worry about a customer slipping and falling at your establishment. However, you may need to get extra protection for losses that may occur in the delivery process.
Generally, the safer you make your workplace, the better your chances are for lowering insurance rates. Dropping all company vehicles and using a third party delivery service is an example of how you can cut costs on insurance. Installing non-slip mats to reduce tripping hazards in your office or warehouse is another one.
Once in a while, a business should conduct a commercial insurance review to ensure its policy is up-to-date. At Kneller Agency, we work with you to find reliable and suitable insurance to protect against the unexpected. Contact us today to get started on your tailored coverage.
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