Covering a brand new business against common threats to liability and the property itself is one of the best things you can do to ensure stability and sustainable growth. The flipside of that statement is this: getting complacent about your original BOP and trusting that it will cover you through years of growth and development is one of the worst things you can do – especially for the stability and sustainability of your business.
Business owners’ insurance policies cover you against many different threats at once: theft, inventory damage, defense costs and legal fees, disturbances to your business’s regular income, injuries to non-employees, etc. But they only cover the version of your business against which you took out the policy in the beginning.
Businesses (hopefully) evolve. They take on more stock, more money, more customers, more premises and, with that, more risk. You can’t expect a BOP policy taken out in the business’s infancy to keep covering you when your business has grown to three times the size, but so many business owners do.
It’s easy to buy business owners policy coverage that actually aligns with your business’s current status, size, and scale. Here are three signs you need to review your policy asap and get more comprehensive coverage.
- Your Revenue has crossed the policy’s coverage threshold
It may sound obvious, but you’d be surprised how many business owners forget to review this one number – or assume that the policy is somehow growing alongside them, despite what it actually says on paper.
Why does it matter? Because, if something were to happen – say, a fire disrupted your business’s ability to generate revenue – your policy would only cover you for a portion of the money that you would have made. In other words, your policy could only do a fraction of the job you actually need it to do.
This is disastrous in its own right, but if you have also grown to have more employees on the payroll, other premises to cover rental payments for, or big marketing budgets that are sustained by your regular stream of income, then you could find that the business is suddenly unable to sustain its own weight.
- You’ve added services or locations that the original policy never accounted for
Let’s say you started out as a purely consulting business. A BOP written for a single-service, single-location operation often excludes or underinsures new offerings. So, if you decide to add installation work alongside that original consultation, a major part of your business is totally exposed.
The same goes for taking on new job sites. If they’re not named in the policy, then they may not be covered by the benefit amount.
- You’re facing bigger contracts that demand higher liability limits
Bigger business generally correlates with bigger liability. Larger clients, frequently require certificates of insurance with limits well above what a starter BOP caps out at. You may even find that makes you ineligible for work with certain clients – but, in many ways, that’s a better case scenario than unknowingly operating without a vital umbrella overhead.
Growth is a great thing for any business, but you have to put the bedrock beneath it, or it’s all temporary.
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