It’s an annual event every small business owner knows well: business insurance renewal time. Life is constantly changing and evolving, and so too is your business. Your commercial insurance policy needs to account for those changes to ensure you’re adequately protected.

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 likely receive a notice from your broker that it’s time to renew your policy for another year. It’s important to note that most business insurance policies are not automatically renewed, unlike your personal car insurance policy. Therefore, it’s worthwhile to know when your existing policy expires so you can act beforehand to renew it and not be left uninsured should you not receive a renewal notice.

But what steps should a small business owner take when they receive notice their policy is coming due for renewal? At a minimum, you need to think about how your business changed. Here are five things to think about before renewing your policy:

Man renewing business insurance

1. How has your inventory or services changed?

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, it’s possible you need to add or up your product liability insurance coverage. Did you add to your business’s menu of services? For example, maybe you’re now providing delivery services to your customers because of the ongoing pandemic. Whatever the case may be, consider how your business has changed or expanded. You may need to increase the limit of your commercial property insurance if your warehouse footprint is expanded, or add a commercial auto policy if you’re now making deliveries to customers.

2. Did you move your business to a new location?

If your office, retail store, or workplace moved to a different location, you need to inform your broker. 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. Did you purchase new equipment for your company?

Whether new computing systems or machinery, if you bought new equipment to replace outdated gear or added new equipment as your business grows, you need to protect it 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. If you already have these policies, you may need to increase your coverage limits.

4. Are you conducting more business online?

Maybe during the pandemic, you decided to shift as much of your business online as possible. That’s sensible. But moving from bricks to clicks comes with risks. Cyber liability protection has always been essential coverage for any small business operating online. 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 sold to them.

5 .Has your annual revenue increased or decreased?

If your sales are up and you’re making more revenue than you did before, let your broker know. If your income has risen, your existing business interruption policy’s loss of income coverage may no longer be sufficient, and you need to improve your protection. 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 My Small Business Can Affect My 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 an alarm system and surveillance cameras installed at your premises? Any measures you voluntarily take to protect your business and prevent losses or damages might trigger a decrease in 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 of your home province. Let your broker know about that since it’s possible you now face more significant risks, and your policy needs to account for them.
  • Switching to a home-based business. Did you start a new home-based business? If so, investigate purchasing 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. If, on the other hand, you’ve switched to working remotely or at home instead of an office place because of COVID-19, have a conversation with your broker about it and ensure your existing policy covers you and your employees who are working from home.

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. Your broker may recommend revising your coverages to reflect where you are now and expect to be throughout 2022. 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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