When Should You Purchase Insurance?
We started this guide noting that you may have to prioritize your coverage needs based on your budget. One thing to keep in mind is that your insurance needs will change as your business does. Here are some common scenarios that could affect your insurance
- Your business grows. As your sales expand and you start to work with more clients, your liabilities also expand. Some policies, like Business Interruption Insurance,
are tied to your businesses income. If your income increases, you may need to adjust your coverage. Other policies, including Errors and Omissions Insurance,
are tied to the amount and type of work you do. New clients and higher-stakes jobs mean that a lawsuit could be more expensive now than when you first purchased E&O Insurance. You may need to bolster your coverage.
- You hire new employees. Workers' Compensation Insurance and other policies may be tied to the number of employees you
have. Hiring your first employee typically means you'll need to invest in a WC policy.
- You sign a new contract. Many contracts include language requiring you to have a certain amount Errors and Omissions Insurance, General Liability, or Property Insurance.
- You expand or change your services. Naturally, changing what you do will change your coverage needs. If your business expands to include more driving, you may need to purchase Commercial Auto Insurance / Hired and Non-Owned Auto coverage (which can be purchased through a General Liability Insurance policy).
If you start to work with clients who have a lot of sensitive data, a Cyber Liability Insurance policy could be vital to protecting your business.
- You purchase new equipment or other property. If your business moves to a new office or purchases new computers, it may need to change its property insurance to reflect its new property. Many big-ticket pieces of equipment and tools
must be listed out in a schedule with your Property Insurance (usually this is for property worth more than $1,000, like computers).
You may be wondering, How do I change or expand my insurance? For many policies, you can simply talk with your insurance agent and they'll be able to increase your coverage. Naturally, for increased coverage you'll have to pay increased
premiums. Luckily, our insurance agents can send you a Certificate of Insurance quickly to reflect your new coverage so you can sign new contracts.
Next: How Do Contracts Protect Your Business?