Congratulations, your business is growing. But before you start celebrating, are you sure your insurance still protects everything you worked so hard to achieve?
It’s not exactly news that small business owners spend a great deal of time focused on how to grow their business. But as the economy thaws and your circumstances change for the better, don’t let growth catch you unprepared. Protect your hard work and persistence by reviewing your insurance policies to make sure they keep up with current business needs.
As Pedro Hernandez at Small Business Computing notes, it’s common sense to review and update your insurance policies when you get married or buy a house. The same holds true in your business life. Insurance coverage that doesn’t keep pace with your business needs can hand you a serious financial setback or, in the event of disaster, it can drive you out of business altogether.
The good news is that it doesn’t take a lot of effort to keep your policies current with your needs – just a thoughtful talk with your insurance agent. Here are some small business insurance tips on what to discuss.
Insure against hackers. You might think your business is too small to attract the attention of hackers, but you’d be wrong. “Small businesses suffer cyber losses and hacking losses at a rate that’s just as big as for big businesses,” said John O’ Connor, a vice president at Travelers’ Small Commercial division. Check your current Business Owner Policy (BOP) and make sure it covers business data loss. If your business gets hacked and you lose customer data, the resulting lawsuits and fines can be very expensive. Ask about policies that cover remediation and customer notification services.
Protect your inventory. O’Conner urges small business owners to think about damage to their inventory. Is it properly stored and protected? Ask about insurance that covers you in case a supplier goes out of business or a third-party warehouse damages your inventory.
Consider contingency planning. Protection and risk mitigation go hand-in-hand, as any good insurance agent will tell you. Good planning – such as redundant and contingent suppliers – can keep your business up and running even if you lose a major supplier.
Vet and train all employees. Some insurance companies offer services for employee background checks, which can reduce the risk of a bad hire. Also, you can avoid or reduce employee injuries by properly and persistently training your employees.
Update your BOP. If you don’t have a Business Owners Policy, get one. And if your company is expanding, you really need to make sure the BOP covers your current needs, enough to cover new equipment or a growing headcount. It doesn’t have to be extensive, said O’Conner. At a minimum, you should look for “a package policy that includes property coverage, includes business interruption and repays your profits.”
Protecting your business as it grows is just common sense. And it gives you peace of mind as you plan to take your empire to the next level.
Lauren Simonds is the managing editor of Small Business Computing. Follow Lauren on Twitter.
Adapted from Business Insurance: 5 Tips on Preparing for Growth by Pedro Hernandez at Small Business Computing. Follow Small Business Computing on Twitter.