Growth is usually a good problem to have.
You hire more employees. Revenue increases. You purchase equipment. Your operations expand. Maybe you move into a larger location, add vehicles, introduce new services, or begin working with larger clients.
But as a business changes, its risks change with it.
One of the easiest things to overlook during that growth is whether your insurance program still reflects the business you operate today.
A policy that made sense when your company was smaller may not provide the same protection once your operations become more complex.
Here are seven areas growing businesses should periodically review.
1. Property and Equipment Values
Businesses accumulate assets gradually.
A few new computers here. Additional equipment there. New furniture, inventory, machinery, or improvements to the property.
Individually, these purchases may not seem significant. Over several years, however, the value of what your business owns can change considerably.
If the limits on a commercial property policy haven’t kept pace, the business could discover that its coverage no longer reflects the actual value of its property.
Regularly reviewing equipment, inventory, improvements, and replacement costs can help keep coverage aligned with the business.
2. Business Interruption Exposure
Property damage is only one part of a major loss.
The larger financial problem may be what happens while the business cannot operate normally.
Revenue may slow or stop while expenses continue. Payroll, rent, loan payments, utilities, and other obligations don’t necessarily disappear because operations have been interrupted.
As revenue and operating expenses grow, businesses should periodically reconsider whether their business interruption coverage reflects their current financial reality.
3. Cyber and Data Risk
A company doesn’t need to be a technology business to have cyber exposure.
Customer information, employee records, payment systems, cloud software, email accounts, and online banking can all create potential vulnerabilities.
As companies become more digitally connected, the financial consequences of a cyber incident can increase.
Cyber insurance can potentially address risks such as data breaches, ransomware, business interruption, recovery expenses, and certain liabilities associated with compromised information.
The appropriate protection depends heavily on how the business stores data and uses technology.
4. Employment-Related Liability
Adding employees doesn’t only increase payroll.
It can also increase exposure to employment-related disputes.
Claims involving discrimination, harassment, wrongful termination, retaliation, and other workplace issues can become significant expenses for a business.
Employment Practices Liability Insurance, commonly known as EPLI, is designed to address certain employment-related claims.
As a workforce grows, this is an area worth discussing as part of a broader insurance review.
5. Commercial Auto Exposure
Vehicles are another area where businesses can change without realizing their insurance program needs to change with them.
Perhaps the company originally had one vehicle and now operates several. Employees may use personal vehicles for business purposes. New employees may regularly drive company vehicles.
Each change can affect the company’s overall auto exposure.
Businesses should periodically review who is driving, which vehicles are being used, how those vehicles are used, and whether current coverage reflects those operations.
6. Liability Limits
Growth can mean larger customers, larger contracts and greater financial exposure.
A liability limit selected when a company was generating significantly less revenue may deserve another look several years later.
Some organizations also begin encountering contractual insurance requirements as they pursue larger clients or commercial relationships.
Commercial umbrella or excess liability coverage may provide additional protection above certain underlying policies when higher limits are appropriate.
7. Employee Benefits and the Changing Workforce
Insurance planning isn’t limited to protecting buildings, vehicles, and operations.
As organizations grow, attracting and retaining employees can become increasingly important.
Group health insurance, disability coverage, retirement programs, and other employee benefits can become part of a company’s broader strategy for supporting its workforce.
The right structure depends on the organization, its employees, and its long-term goals.
Your Insurance Program Should Evolve With Your Business
There isn’t a universal insurance package that works for every company.
A 10-person business and a 75-person business may operate in the same industry while facing very different exposures.
That’s why insurance shouldn’t necessarily be treated as something that is purchased once and forgotten.
Major changes in revenue, payroll, property, vehicles, contracts, technology, employees, or operations are all good reasons to review whether an existing insurance program still reflects the business.
North Shore Insurance Associates works with businesses to evaluate their insurance needs and understand the options available to them.
If your business has changed significantly since your insurance program was established, it may be worth taking another look.
Contact North Shore Insurance Associates to discuss your business and determine whether your current insurance strategy still aligns with where your company is today.
Insurance products, availability, terms, conditions, and coverage vary by carrier and policy. This information is provided for general educational purposes and is not a substitute for reviewing the terms of an individual insurance policy.