Life is constantly changing and evolving, and so is your business. Your commercial insurance policy must account for those changes to protect you.

Small business insurance policies are typically one-year contracts between an insurance company and an insured or business owner. A month or two before your policy expires, you will receive a notice from your broker that it’s time to renew your policy for another year. 

Unlike your personal car insurance policy, most business insurance policies are not automatically renewed. That’s why it’s worthwhile to know when your existing policy expires so you can act beforehand to renew it to avoid a lapse in your coverage and being left uninsured.

But what steps should a small business owner take when they notice their policy is due for renewal? Here are five things to think about before renewing your policy:

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1. Your Products and Services

Over the past 12 months, did you expand the types of products you sell or increase the amount of inventory you’re holding in storage? If so, you need to add or up your product liability insurance coverage or increase the limit of your commercial property insurance if your warehouse footprint is expanded. 

Also, consider your business’s menu of services. For example, suppose you’re an HVAC contractor offering a new service such as gas line installations. In that case, let your insurance broker know so it can be accounted for in your general liability and professional liability coverages.

2. Moving to a New Location or Renovating Your Business Property

You must inform your broker if your office, retail store, or workplace moves to a different location.  

Your business’s location is one of several factors insurance companies consider when determining your annual premium. Your premium may decrease if you’re now located in a smaller, safer building or one with increased safety measures. 

Perhaps you didn’t move to a new location but built an extension to or renovated your existing commercial property. If so, it may affect the cost to rebuild your property following an insured event such as a fire, or it could mean your existing commercial general liability coverage needs to be re-examined. Therefore, let your licensed broker know about the changes to your business space.

3. Purchasing New Equipment

Whether new computing systems or machinery, if you bought new equipment to replace outdated gear or added new equipment as your business grows, protect them with equipment breakdown insurance

Or you may require tools and equipment insurance if yours are transportable tools you use to complete work-related projects. Think about the new equipment you now have. You may need to increase your coverage limits if you already have these policies.

4. Doing More Business Online

During the pandemic, or despite it, you shifted much of your business online. Moving from bricks to clicks comes with risks. Cyber liability protection has always been essential coverage for any small business operating online, and doubly so if you’re exclusively selling goods and services digitally. 

Also, if you’re selling goods online through a third-party marketplace such as Amazon, Etsy, or Wayfair, be sure you’ve got product liability coverage as part of your policy. You are potentially liable for injuries, illnesses, or property damage any of your customers suffer from any product you sell to them.

5.Your Annual Revenue

If your sales are up and your income has risen, your existing business interruption policy’s loss of income coverage may no longer be sufficient. Your annual and projected revenue are other factors insurers consider when determining the cost of your policy. Likewise, if your annual revenue has decreased, share that information with your broker.

What Other Changes to a Small Business Affect Your Insurance Coverage?

There are, of course, other factors to weigh when renewing your small business insurance policy that may result in a decrease in your annual premium. 

However, others could reveal the need to up your protection to ensure you’re covered for any unexpected mishap or event. For example, some of those changes could be:

  • Adding new physical security measures. Did you have a monitored alarm system and surveillance cameras installed at your premises? Any actions you voluntarily take to protect your business and prevent losses or damages might decrease your premium since insurance companies appreciate and recognize small business owners who take proactive steps to safeguard their workplaces.
  • Operating in a different province. Let’s say you’re growing your business by selling goods or services outside your home province. Let your broker know that you may now face more significant risks, and your policy needs to account for them.
  • Legal and regulatory requirements. Keep abreast of changes to local, provincial, or federal regulations that might affect your insurance requirements specific to your industry or location. For instance, if new data privacy regulations are enacted in your province, they may impose stricter requirements regarding collecting, storing, and processing personal data.
  • Switching to a home-based business. Did you start a new home-based business? If so, you may need a home-based business insurance policy. Why? Because most personal home insurance policies will not cover accidents or events occurring at a residential property that is business-related.

Whether your company has changed a little or a lot in the past year, talk to a licensed Zensurance broker about them and any concerns you might have. Ask for a review of your policy to understand the coverages, limits, and exclusions and ensure they align with your business’s requirements. 

Your broker may recommend revising your coverages to reflect where you are now and expect to be in the coming months. After all, you don’t want to be overinsured, or worse, be underinsured and find out after filing a claim that you lack the correct type of coverage.

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About the Author: Jon Hogg

Jon Hogg is the Senior Team Lead, Renewals, at Zensurance.