Business insurance is an essential tool for all business owners, but there is no “one size fits all” approach to choosing a policy. In fact, your insurance needs may change over time as your business evolves and circumstances change. Here are three ways that periodic check-ins about your insurance needs can help save you money in the long run.
1. You May Be Over-Insured:
The most apparent issue you will want to stay on top of is whether or not you are paying for insurance you no longer need. For example, if you previously operated out of a storefront but have shifted to an online shopping experience due to the pandemic, you may have less of a need for expensive property and liability policies. This is a great reason to check how insurance will be affected whenever you make a significant change in your business operations. Paying for insurance that you no longer need is a frustrating way to part with your hard-earned money.
2. You May Be Under-Insured:
Likewise, when you make a change, such as moving into a new location or adding a bicycle delivery service, you may need to purchase additional insurance. Failing to insure yourself properly could lead to expensive repairs or even legal matters should an accident occur. Being under-insured for such unfortunate events could open yourself up to the risk of personal liability. While it may be painful to add extra insurance to your monthly bills, it could easily save you from catastrophic expenses in the long run that would be even more damaging to your business or even your personal finances.
3. Property Valuations May Change:
It is crucial to make sure that your property insurance covers the replacement value of your business property as opposed to its value at the time of acquisition. You do not want to end up in a situation where if your property is damaged in an event such as a severe storm, you do not have adequate insurance to replace it. This could result in leaving you stranded and unable to keep operations afloat at a time when you need income the most. Staying in touch with your insurance agent and periodically checking in on how your insurance coverage relates to your property’s replacement value will help you rest easier knowing that you will have the means available to replace your property should a worst-case scenario arrive.
These talking points about your property value and changes in business operations can be useful in guiding periodic conversations with your insurance agent to check in on your needs. Making regular inquiries into whether you are paying the correct amount for insurance — and the policies that make sense for your specific business needs — will help you manage your company’s finances, provide you with protection in the event of a disaster, and generally give you less to worry about. As a business owner, that is well worth the time spent keeping track of your changing insurance needs.