Most business owners realize having insurance is an essential company expense to protect their firm from unexpected claims or actions. However, what is perhaps less commonly-known is that there are multiple situations when your company’s insurance cover may become redundant and need to be updated.
Through the lifecycle of most businesses, multiple changes can occur that may end up rendering its previously-adequate insurance cover ineffective.
Ideally, you will have already signed up to a company that offers Flexible Trade Insurance Policies which can adapt as you grow your company. There are many situations that may require a review of your current insurance policy to update your cover.
Upsizing, downsizing or changing your business location
There are multiple reasons why you may decide to change the location of your business but regardless of the cause, you will need to inform your insurance company to avoid invalidating your cover. Just like your home insurance, a business insurance policy is inherently tied to a specific address and your cover will end if you move premises without updating your insurance provider. Also, the cost of your policy will most likely change if you move address – meaning, especially if you downsize, your premium will very likely reduce. Always advise your insurer if you change premises to get the most updated price.
Changing or increasing your product/service portfolio
Growth is great for any company and the opportunity to expand your product or service portfolio can only be good news – however, it can also have a significant impact on the cover you have from insurers. If you move into new sectors or change your company’s direction, you must consult your insurance company to check they can still offer the required provisions.
Increasing – or reducing – your staffing levels
Like all forms of insurance, business cover is calculated on the potential risk of pay-out to the insurance company so increasing or reducing your headcount can make a huge difference to the amount you have to pay in order to cover your workforce. You should advise your insurance company if your company is expanding or reducing its staff to see if your outlay will change. The change in expenditure can be considerable.
Company mergers or acquisitions
Mergers or acquisitions normally happen to allow companies to join together to increase their business prospects – which almost always will result in expansion into different markets. While both companies will likely already have insurance covering their existing sector and operations, the new entity made by an acquisition or merger will probably require an entirely different policy or policies. Check with your insurance broker to make sure you’re covered.
Adding new clients or diversifying your areas of operation
The internet has made the world a considerably smaller place and it’s now very common for even the most local of companies to have a global client base. Working and operating in foreign territories leaves you susceptible to different laws, regulations and restrictions making it essential that you ensure your company is properly covered against possible overseas legal problems.
In the same way your business is (hopefully) evolving and growing, so will the requirements of your insurance policy need to change and adapt to allow you to expand into different markets. By taking a proactive approach to your cover, you’ll be able to focus on new areas while also ensuring you’re protected against any potential problems.