What Business Changes Require You to Assess Your Insurance Coverage?

In the world of business, responsible organizations must establish versatile and robust loss control measures, including adequate insurance coverage. For most companies, business insurance is crucial to ongoing financial security. However, securing appropriate coverage does not mean a policyholder can become complacent or less vigilant about ongoing risks and changing exposures. Throughout their lifespans and evolutions, businesses must often reassess their insurance to ensure they remain appropriately covered.

5 Situations That Should Trigger Reassessment of Insurance

Business insurance may refer to a portfolio comprised of several types of policies. Exact coverage needs may vary significantly depending on a company’s unique circumstances, including its legal requirements, coverage needs, budgetary situation and risk tolerance. Still, regardless of its contents, at least certain parts of a business insurance package may need to be reviewed due to the following:

• Relocation or expansion—Should a business move or expand its operations to a different location, such as a new state, it may be subject to different insurance-related laws. Additionally, other geographic areas may also require coverage to account for changing risks, such as hurricanes in coastal areas or earthquakes when closer to fault lines.
• Ownership changes—If a company is acquired or its ownership structure changes, many details of insurance policies may need to be changed. Furthermore, new owners may have differing preferences regarding risk tolerance and coverage details, making it necessary to revisit selections.
• Legislation changes—Organizations of all sizes and across all sectors may be subject to various legal requirements regarding insurance coverage. Businesses must remain apprised of new or changing laws and make necessary adjustments to their coverage to avoid fines, lawsuits and other costly consequences arising from noncompliance.
• New services or operations—As a business’s offerings evolve, it must account for changing risks and exposures. For example, cyber liability insurance becomes a crucial investment if a company expands its operations to utilize more digital solutions, such as cloud servers. Similarly, businesses that begin providing delivery services or otherwise utilizing motor vehicles are generally required to secure commercial auto coverage.
• Significant growth or reductions—Organizations that experience rapid growth or must make cuts due to financial downturns should revisit their business insurance portfolios to ensure their policies remain adequate and optimized. This can help ensure appropriate financial security or limit excessive spending on coverage that may no longer be necessary.

We’re Here to Help

Home Loan Insurance has a history of serving businesses, families and individuals in the Grand Junction and Montrose, CO, areas dating back over 125 years. Our dedicated staff will draw on this extensive knowledge and experience to help organizations secure appropriate business insurance and understand when they may need to reassess coverage. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.