How to Review Small Business Insurance as Your Company Grows
A new customer, a first employee or an equipment purchase can change more than your growth plan. It can also change the risks your business needs to address. Reviewing insurance as the company develops can help you ask better questions about coverage before a loss or a contract deadline makes those questions urgent.
Begin with the work your company does today
Write down your main services, where you work, whether customers visit, the equipment or inventory you use, and whether you have employees. Include changes since your last policy review. Tell the insurance professional about activities that might not be obvious from your business name.
A contractor working at customer locations may have different concerns from a consultant delivering advice remotely. The point of the review is to connect the coverage conversation to your actual operations.
Four coverage conversations to consider
The right combination depends on your business, location, contracts and insurer. These categories provide a starting point for discussion:
- General liability: Ask about common claims involving customer injury or damage to someone else's property.
- Business owner's policy (BOP): A BOP combines general liability and commercial property coverage. Ask whether your business qualifies and what the proposed package includes.
- Professional liability: Also called errors and omissions insurance, this addresses certain claims related to professional services or advice. Ask which work and circumstances the policy covers.
- Workers' compensation: Discuss employee injury coverage and the requirements that apply where your employees work. Have the partner explain how your staffing arrangement affects your options.
These are not a complete checklist for every company. Vehicles, data, specialized equipment or other activities may call for additional discussion with the insurance partner.
Use the same details when comparing quotes
Price comparisons are more useful when the underlying coverage is comparable. Review the limits, deductibles, exclusions, policy period and business activities described in each quote. Ask what would be paid by the insurer and what would remain your responsibility.
If a customer, landlord or other party requests evidence of insurance, bring the actual requirements to the conversation. Ask the partner to explain what a proposed policy can document, rather than assuming a familiar policy name satisfies every contract.
Revisit coverage when the business changes
Useful review points include adding staff, changing locations, buying equipment, offering a new service or taking on a different kind of customer. Keep current policy documents and business information together so the next review begins with accurate details.
Before changing coverage, confirm the insurer, terms and effective date. Have the partner explain how any transition would work so you understand when protection starts and ends.
Keep business credit and insurance in their proper roles
A company credit record can be relevant to financing and supplier relationships. Insurance addresses covered risks under the terms of a policy. A stronger business credit file does not ensure a lower commercial insurance premium.
Your business activities, location, claims experience, coverage choices and other underwriting factors can affect a quote. Treat credit building and insurance review as complementary planning tasks, with separate outcomes and requirements.
Explore Insurance Advantage with Insureon
eCredable's Insurance Advantage connects you with Insureon to explore business coverage. Your Business Lift subscription does not include an insurance policy, and any policy premium is separate from the reporting subscription.
Explore business coverage with Insureon. Start with current information about the work you do and the questions you want answered. Learn about eCredable business credit reporting if you also want to understand the company's credit-building options.
Further reading: Insureon: Small Business Insurance.