Start Your Business's Spring Cleaning with a Review of Your Commercial Insurance Policy

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Once a year, people deep clean their homes, review the progress they have made with their New Year's resolutions and look over their budget. When you own a business, build a spring cleaning to-do list, too. Start off the spring season with clear inventory records, fresh financial goals, and clean equipment. One of the most important things that you should do once a year is to review your old commercial insurance policy.

Make sure that your commercial coverage is still the best one for policy for your company, or look around for better options. It can be tempting to give these decisions a cursory glance and then simply re-commit to the same policies every year. But investing time in a thorough review can bring you many advantages. Here are three reasons to read over your policy this week.

1. Understand Your Policy from Start to Finish

Start your spring cleaning by reviewing your company's commercial insurance policy.

Set an appointment with your agent or a specialist to thoroughly go over your existing policy. You can ask them questions about your coverage, potential improvements, and the gaps in your current policy that can endanger your company. Business policies are intricate and their cost depends on many variables. So having an expert explain the exact nature of each clause can prevent you from getting things you don't need or skipping things that you do.

For example, if you bought a business owner's policy last year and it included general liability, you may not know what sort of lawsuits are covered by it. You might think that if you have general liability and you make a mistake in your work that leads to a lawsuit, the cost of defending yourself is covered. The problem is that those types of lawsuits are covered by another type of insurance: professional liability, sometimes called errors and omissions. General liability is more for property damage. 

An expert will be able to explain the implications of precise wording. For instance, your insurance policy may be worded in such a way that your policy will have to cover injuries that appear after the policy has expired. Some policies only cover damages that were discovered during the insurance term, while others cover damages that were caused during the insurance term. Having the wrong type can leave your company on the hook.

A solid annual review will also make you more knowledgeable about insurance in general, which is an important part of running your business. You can ask them what a standard BOP for your industry might cover and what might be omitted normally from many policies, despite being called 'comprehensive.' Everything you learn lets you protect your business better.

2. Keep Your Policy Aligned With Your Business

Probably the most important advantage that comes from giving your current insurance policies an intensive vetting once a year is that you can see where your business's insurance needs have changed. Companies change size and direction all the time. So make sure those changes are reflected in your commercial coverage.

Has Your Business Grown?

You might have started out doing a little side-hustle in your private home. Back then, you didn't use a lot of equipment, and you thought your homeowner's policy covered a lot, if not all, of what you did use. But over the last bit of time, your business may have outgrown your home and started requiring specialized equipment to allow you to cover all the orders you were receiving. Your old policies will no longer cover the amounts of money you can lose if your warehouse catches fire or that equipment breaks. 

You may also need to modify your commercial coverage if you're hiring employees for the first time or increasing the number of employees beyond certain thresholds. Even hiring freelancers or contractors could mean your policy needs a change.

Have You Changed Your Business Focus?

You may also be trying new things with your business, such as creating a new type of product that opens you to new sorts of liabilities. Is your company now delivering to people's homes? If so, you may need auto insurance specifically tailored to your business. If you have started working with international vendors, that opens you up to new types of liability that you need insurance for. 

There are also many things that are often left out of insurance policies that may affect your business now. Flood damage, for instance, is typically not covered by a lot of policies, but your company may be in a flood zone. You might also not be covered for earthquake damage, depending on your state, but earthquakes can happen anywhere and jeopardize your equipment. You might be underinsured for fire damages, or not be covered for reputational harm. Do your employees drive their personal vehicles while working for you? Your commercial auto insurance probably doesn't cover them as insureds unless you specifically ask for that endorsement. Your yearly policy review will let you find these holes and fill them before you have to pay for them.

3. Run the Numbers to Ensure That Your Policy Is The Best Financial Deal Available

Every year, insurance companies revamp their policies. Sometimes that makes certain types of coverage more affordable or more comprehensive. As a business owner, you will want to get the best return on your value. The best way to make sure you're getting a fair deal is to shop around instead of settling.

Getting a fresh start with a new commercial insurance provider can have unexpected savings. For example, you may have bought a general business owner's policy when you first started your company but then had to buy additional policies as your business expanded. Add-ons over time almost always result in a higher monthly premium. It may be time to bundle all those policies together with a new company in order to save money on your monthly bills. It might also be possible to find a better price with another company because they offer discounts that your old company doesn't. Looking for new quotes might simply match you with a company that offers a much lower premium for the same coverage. It is worth your time to find out what your options are.

So dust off your insurance policy and read through the fine print before your company's busy season gets underway. If your company's old commercial insurance policy could use revamping, put your zip code in the field at the top of this page and see what quotes CommercialInsurance.NET can find for you. 

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