Businesses change with time. Some grow, others regress. Staying profitable depends on not only how much product or service you render but also on how you control expenditures. Although insurance is an investment, it is an expenditure until it is used. That’s why it’s a good idea to look over your commercial property policies and general liabilities to make sure that they are fulfilling your current needs.
If your business has had a significant change in revenue, acquired or sold property or grown in employee size, you may want to periodically review/ audit your coverage. There may be ways you can save money by re-evaluating your insurance requirements. Additionally, according to insurance professional James McAluney, you may find that your old insurance does not completely cover your business’s new growth and is liable to new risks.
Changes in Location or Property
Commercial property insurance makes up a large portion of most business insurance needs. Moving to another location necessitates getting new property insurance. But when additions or changes are made to existing business structures, many owners fail to modify their coverage. “This is probably one of the most overlooked areas in business management,” states James McAluney. “After investing largely into a business renovation project or other property addition, it could increase the overall risks to the financial security of a company if not insured properly.”
Also, companies can find savings in their insurance policies if new safety features have been added to the business’s property. Items such as updated sprinkler systems, safety hand railing in stairwells and security systems can help in lowering business insurances. If you have moved or made changes to your property, be sure to review/ audit your policy.
Cash Flow Changes
Your business’s ability to have workable income on hand can determine the structure of your insurance policies. Remember that your insurance requires two payment types: the monthly premium and the deductible (when damages are incurred). Deductibles are often required to be the paid in full before the insurance starts to cover the costs of any damages. Before getting insurance, make sure you understand the cash-flow strengths of your business.
In situations where cash is not readily available, consider a lower deductible. “What good would any insurance do if when an accident occurs and you can’t afford the deductible?” warns Jim McAluney.
When business cash is readily available, increase your deductible. “There are monthly savings to be found in auditing your insurance and choosing higher deductibles,” says Jim McAluney. Monthly premiums are decreased this way and businesses that are operating safely and without incident are decreasing their expenditures.
How Has Your Business Grown?
Insurance needs shift with business growth. Changes in the number of employees, services or products or company vehicles can require insurance updates. “An annual review of your business’s insurance can help you stay protected from risks associated with growth,” reminds Jim McAluney.
James McAluney is a local insurance broker that specializes in getting businesses the best insurance for their situations.