The Importance of an Annual Policy Review

As your business grows and evolves, your insurance needs will expand and change to match your growing business exposure.  A policy suitable when you first started your business could lack coverage to ensure your business is fully covered after you make changes. This is why an annual policy review is a vital part of your insurance renewal.

Renewal is a perfect time to review your insurance policy with your agent. If your business has grown, you may not be fully covered and could have a coverage gap.  On the other hand, if you have scaled down business operations, you may be paying for more coverage than you actually need. This is why it is recommended to review your insurance policies and your business exposure annually with your agent to make sure that your policy matches your insurance needs.

Your agent can help you determine if your insurance exposure has changed during this annual policy review and if your current policy is adequate. The more your agent knows about your business, the better they are able to help you avoid coverage gaps.

Business Exposure Changes

Adding new products and/or new services means that you may need a different type of insurance that better suits your needs, especially if you are on a Business Owner’s Policy. Have you started selling goods with your own name brand on them vs selling good of others? Are you working with independent contractors or taking on more complex contracts with your clients? Have you hire more staff and/or increased your gross sales? Your general liability limits should be reviewed and an umbrella policy may be necessary.

Property Exposure Changes

Have you changed locations or added a second location? A larger, or smaller location will impact your insurance needs, especially if you own the building when before you were just renting.

Have you added more inventory and/or business personal property, such as new equipment? Adding office equipment, phones, computers, and even office furniture all needs to be considered when looking at your business personal property limits.

Improvements made to your warehouse, store, or office means that you need to assess if your current limits are enough. Upgraded equipment, expanding your sales inventory, and adding new fixtures and furniture can all mean that your property limits are no longer sufficient and you could be underinsured.

Auto Exposure Changes

If you have a commercial auto policy, have you added or replaced any of the vehicles recently? Do any new employees drive the cars? Most carriers will require the information of all drivers to ensure that they have acceptable motor vehicle reports.

If you do not have a commercial auto policy but you use your car for business purposes, your personal auto policy may not cover you in the event of a loss if you are using your car for commercial purposes.

Evaluate Other Insurance Needs

The annual policy review is a perfect time to evaluate the need for other insurance to cover gaps in coverage. If you have employees, you need to consider adding EPLI coverage, as claims are expensive and on the rise.  Online retailers or businesses that handle sensitive information from consumers should discuss Cyber Liability coverage to protect them in the event of a cyber incident.  If you have warehouse equipment for packaging or manufacturing, you should consider machinery or equipment breakdown insurance.  It is important to not only ensure that your limits cover your exposure, but that you are fully covered for all aspects of your business.

At Fixated Financial and Insurance Solutions, we work closely with our carriers to bring the best coverage for the best prices. Your business needs are unique and we will we review all of our policies at renewal to ensure that they are placed with the best carrier for the most competitive price.  Coverage reviews are an important part of the services that we offer, for new and existing clients.