It can be easy to fall into a routine of mindlessly renewing your insurance policies each year, but taking a second look at your choices before you agree to renew can have lasting financial and practical benefits. Take a minute to think about the reasons that you might want to spend a little time auditing your insurance policies each year.
#1: YOUR BUSINESS HAS CHANGED
While this might seem obvious to any experienced business owner or entrepreneur, your business and its needs will be constantly changing and evolving. What may have been a good insurance decision last year, may not be a good fit today. You may need to expand your coverage to include additional scenarios, or cut back and save your business money in the long run. The only way you will know this is by reviewing your insurance policy annually.
#2: INSURANCE RATES CHANGED
Shop around and get a quote from several different insurance companies. Insurance companies are always changing their pricing, packages, and discounts. Just because one company offered you the best option last year, does not mean that they will continue to be the right choice for your business in the future. By shopping your policies elsewhere you may find that you are entitled to additional discounts.
#3: YOUR STAFF HAS INCREASED OR DECREASED
In many states, you will only be required to carry worker’s compensation insurance if your company exceeds a certain number of employees. If you cross this threshold, you could face stiff penalties for not offering worker’s compensation. On the other hand, if you no longer have enough employees to meet this requirement, you might be able to save money by your dropping worker’s compensation policy.
#4: YOUR ASSETS HAVE GROWN
If your business has grown, you will need to increase your coverages. Some examples of this are an increase in office space, an expansion of inventory, or an upgrade in technology. If your company has substantially grown, you may even need to look into additional types of insurance in order to meet your company’s needs. If this is the case, make sure you look into any discounts available for bundling together your various insurance policies.
#5: YOU MIGHT NOTICE A MISTAKE
While most insurance agents are very good at their jobs, they are only human. Mistakes sometimes happen. Unfortunately for you, a mistake in your insurance policy could cost your business big time down the road. Even if you are not planning to make any major changes to your insurance policy, auditing your insurance documents each year can be a great way to catch any mistakes before they become problematic.
For these five reasons, you will definitely want to take the time to go over your business’s insurance policies before it comes time to renew them. Any questions? Let’s talk.
Opinions expressed in this article are solely the author’s opinion, not intended to provide the reader with legal or any other professional advice. Should you need advice or opinion, consult with a qualified professional to address your specific needs.