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.