Many small businesses expect to grow this year. However, with that growth, there are risks.
While being able to grow is excellent, it does require planning to mitigate the risks of moving to a new location, hiring an employee, offering a new service or releasing a new product, and/or buying new furniture or equipment. All of these improvements should inspire small business owners to contact their insurance agent to make sure their coverage grows with their business.
New Location
Whether the move is from a home office to a commercial building or from a small office to a bigger one, small business owners should update their insurance policies when they submit a change-of-address form. Both a commercial property insurance policy and a general liability insurance policy—often bundled as a Business Owner’s Policy or BOP—are bound to the business’s physical location.
New Employee
Bringing on a new employee is an excellent indicator of business health. It also means that small business owners will need to update their workers’ compensation insurance.
Growth small business owners expect this year:
- 58% expect to buy new equipment or furniture
- 33% plan to hire an employee
- 23% will move to a new location
- 30% will offer a new service
- 34% plan to sell a new product
New Service or Product
Expanding services and products is a smart growth move to attract new clients and increase revenue from existing clients. From a risk management perspective, though, new potential errors or possible customer illness or injury require an insurance update. Small business owners will need to update their professional liability insurance and/or the product liability portion of their general liability insurance. While the updates may not change much about the policy or price, it’s a good way to make sure the business is still adequately covered.
New Furniture or Equipment
If these items are valuable, business owners should make sure their business owner’s policy or commercial property insurance has adequate limits to cover them.
No Growth Plans
Even if you do not plan to grow your small business this year, checking in with your insurance agent is still a good idea. Far too many businesses are underinsured, leaving them vulnerable to going out of business. For more information on the risks of being underinsured, read our case study, “Have You Ever Read Your Commercial Insurance Policy Cover-To-Cover?“
Statistical information gleaned from Insureon.com survey of small business growth expectations for 2017.