Most new business owners are concerned that everything is favorable for the success and safety of their business, which includes obtaining the protection of business insurance.

However, longevity and success can cause complacency. If you started your business a decade ago with a small space and a computer desk, but now have an office full of employees and equipment, using the same insurance policies may leave you under‑insured.

Other insurance types to consider

• Excess Liability or Umbrella - covers claims exceeding your standard policy's limits.
• Workers Compensation - once your business reaches a certain number of employees, this insurance is required in most states to provide payments for lost wages and medical expenses following a workplace injury.
• Professional Liability - covers mistakes in the services you provide and usually covers attorney fees.
• Auto, Hired and Non-Owned - protects your business if an employee causes a vehicle accident in a personal or rented vehicle.
• Commercial Auto - covers business vehicles and exposures not included under personal auto policies, such as employee loading and unloading.
• Employment Practices Liability - covers HR issues such as termination, harassment, and discrimination claims.
• Directors and Officers liability - financial protection for directors and officers sued for wrongful acts stemming from their duties.
• Employee Benefits Liability - covers liability from an error in administering employee benefits that causes an employee to incur costs, such as failing to provide COBRA information.

Depending on your business, many of these insurances may be essential to adequately protect yourself; see Protecting Business and Personal Goals with Insurance for more information.

An annual insurance review is an ideal time to discuss these insurances, as well as your need for them; review with an insurance agent.

Review checklist

Ensure the following elements are considered as you begin the review:

• Revenue - more business is good, but it also means greater potential liability. Have annual sales changed?
• Property - have you added equipment, computers, or other items that would require increasing your commercial property policy's limits?
• Location - your business owner's or general liability policy could be affected if you've added, closed, or moved locations.
• Travel - a hired and non-owned auto policy may be needed if employees frequently drive rented vehicles.
• Employees - have you had an increase in workforce, turnover, or use of contractors? Consider employment practices liability for high turnover. Workers' compensation may become required if you've added employees.
• Services - are you offering additional services? Some work may require endorsements to your general liability policy.
• Customers - are you serving new clients or industries? High concentrations of high‑risk clients may affect professional liability considerations.

The answers will be different for every business and usually won't remain the same over the business's life. Take advantage of these attributes and annually review your business for exposures and insurance needs.

Insurance may not cover everything, but it can certainly mitigate your risks; learn more about Business Legal Expense Insurance.

Start your annual business insurance review today with one of our insurance agents.

Frequently Asked Questions

When should I review my business insurance?

You should review your policies at least once a year and whenever you add employees, locations, services, or significant property.

How do I know which additional coverages I need?

Assess changes in operations, property, revenue, and clients, and discuss exposures with an insurance professional to identify gaps.

Is workers' compensation required for all businesses?

Requirements vary by state and often depend on the number of employees, so check local regulations and your policy needs.

What common mistakes should I avoid during a review?

Common mistakes include failing to update property values, not adding required endorsements, and overlooking hired/non‑owned auto exposure.

The economic downturn hit the real estate sector especially hard, and many commercial properties have declined significantly in value.

Large price reductions can create buying opportunities, but a low purchase price alone does not guarantee a smart investment.

Key questions to evaluate a property

• How much of the project has been completed and how much remains to be done?
• Does any of the work need to be repaired or redone because the builder, facing financial difficulty, took shortcuts in material quality or construction?
• Do the original construction plans comply with current building codes? Are there any design errors that need correction?
• Are there any significant changes the buyer would like to make to the project?
• What liabilities (debts, lawsuits, penalties, etc.) will the buyer assume with the property?
• Who will be legally liable for any defects in the design or construction of the project?
• If the original owner and builder are responsible for the problems, can the buyer recover from them?
• What insurance covered the original project? Did one program apply to the entire project, or did each individual contractor have its own coverage?
• Will the insurance apply to construction defects?
• If a single wrap-up insurance policy covered the project, did it include a deductible or self-insured retention? If so, and the insured owner or contractor has declared bankruptcy and is unable to pay it, will the insurance still apply?
• Are there special conditions that must be met before the policy will apply when the deductible or SIR cannot be paid?
• Does the original wrap-up policy extend completed operations coverage beyond the policy’s expiration date? If so, for how long?

Many projects were only partially completed when work stopped, so buyers must assess both economic viability and physical condition before acquiring a property.

Prospective buyers should pay special attention to Builders Risk insurance and other policies that applied during construction.

Coverage purchased by the original developer may have been cancelled after work stopped, while a policy bought by a general contractor might still be in force; vacancy and unoccupancy provisions, coverage for catastrophic perils such as flood and earthquake, lost income and extra expense for delays, and the extent of testing coverage all deserve careful review.

Arranging insurance for a property with significant physical or legal problems can be difficult or impossible without specialist help, and an experienced broker can help identify appropriate policies such as Commercial Properties Pollution Coverage and Commercial Properties Umbrella Liability.

If the site is exposed to coastal perils, consider tailored options like Coastal Properties Insurance, and be sure to ask an agent to review limits and exclusions before completing a purchase.

Regardless of how low the purchase price may be, a property is no bargain if it comes with significant unresolved physical, legal, or insurance issues.

Buyers who do thorough due diligence and confirm that necessary coverages are available—or that recoveries from responsible parties are feasible—are most likely to find profitable opportunities.

Frequently Asked Questions

What is builders risk insurance?

Builders risk insurance covers property while it is under construction, including damage from specified perils, but coverage terms and cancellation provisions vary widely.

Can I get coverage for a partially completed project?

Coverage may be available, but insurers will assess physical condition, vacancy, prior damage, and whether prior policies remain in force; some risks can be difficult to insure.

Will a wrap-up policy protect me after I buy?

A wrap-up policy may extend completed operations coverage beyond policy expiration, but buyers must verify the policy language, any deductibles or SIRs, and how bankruptcy of insured parties affects coverage.

What should I ask an insurance broker when evaluating a property?

Ask which policies applied, whether they cover construction defects, how vacancy provisions affect coverage, and whether flood, earthquake, and business interruption coverages are available.