New Year, New Coverage: Why Small Businesses Should Review Their Insurance Policies

The dawn of a new year heralds fresh opportunities for small business owners to expand their enterprises and realize their ambitious goals.

Doing so demands a plan that considers the competitive landscape and explores new ideas for engaging with existing and prospective customers while optimizing operations. 

One of the key tasks business owners should prioritize in early January is reviewing their business insurance policies. This aligns with the strategic planning process for the year ahead and can lead to significant cost savings. There are three primary reasons why this is crucial:

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1. January is typically a time when business owners review their strategies for the year ahead and thoroughly assess their financial challenges and situations.

2. Insurance policies are typically one-year contracts with your insurer. They need to be renewed each year, and many policies come due for renewal in January or the first quarter of the year. Reviewing your policy before renewing it provides an opportunity to ensure the coverage you have aligns with how your business has changed over the previous year or may change in the coming months. 

Our “Guide to Small Business Insurance in Canada” is a free PDF download that explains different types of insurance and can help you make informed decisions.

3. Factoring in your new insurance premium based on the type of policy you require and the tax deductions you can claim meshes with your annual budget plans.

Benefits of Reviewing Your Business Insurance in January

Reviewing liability insurance in January can potentially lead to significant cost savings for small business owners, such as:

• Identifying Cost-Savings: There may be different ways to lower your annual premium. For example, opting to pay your premium annually instead of monthly, bundling coverage (such as buying a business owner’s policy) with the same insurer for a discount, or documenting and sharing your company’s safety measures may lead to an insurer reducing your premium.

• Switching Insurers: Having a licensed broker shop your rate to look for more competitive options and possibly changing insurers as your policy is coming up for renewal and before it expires is not unusual, and it may save you money by getting the coverage you need at a better rate.

• Assessing Coverage Limits: It is smart to understand your existing coverage limits and make adjustments as your business changes or grows. A coverage limit is the maximum amount of money your insurer will pay for an insurable loss during the policy’s term. You have the option to select the coverage limits that suit your needs.

• Addressing Coverage Gaps: Consider where your business is exposed because your existing policy lacks specific coverages. For instance, a homeowner who rents their property short-term through Airbnb and VRBO may require a more robust policy to ensure their properties are accurately covered, or a business owner who doesn’t have cyber insurance as part of their policy but should (a poll of Canadian small businesses in 2024 found only 20% intend to buy cyber liability or cybercrime insurance).

What to Consider When Reviewing Your Business Insurance Policy

There are several factors to consider regarding how your business has changed when reviewing your liability insurance coverage. Here are a few things to weigh:

Changes to Business Operations

Ask what’s new about your business’s operations. For instance, are you offering customers new products or services? Have you expanded to new markets, or are you planning to in 2025? Is your business launching an e-commerce store or using a third-party marketplace like Amazon to complement your brick-and-mortar operations? These types of changes may require you to have higher coverage limits to account for them.

Changes to Business Property and Assets

Think about your business’s location and property – are you expanding or renovating your store, shop, or office? If you’re opening a second location or moving to a new location, these are excellent reasons to look closely at your commercial property coverage. Likewise, are you increasing or decreasing the inventory or merchandise you store or purchasing new equipment? These things should also be considered.

How Your Employee Structure May Have Changed

Has the management team at your business expanded or changed? If so, you may need to look at directors and officers (D&O) insurance to cover the leadership team’s liabilities. Furthermore, if you are hiring or have hired more employees, your insurer should be informed of those changes.

Shifts in Your Business’s Annual Revenue

One of the factors insurers consider when pricing a business insurance policy is a company’s annual and projected revenue. If your business is earning more income, that’s outstanding, but it can also increase your liability risks.

Changes to External Factors Affecting Your Business

If your business or profession operates in an industry governed by a professional association or government regulations, make sure you know if there are changes to those regulations or compliance requirements. 

How to Get Low-Cost Liability Insurance for 2025

Zensurance can help you quickly obtain the comprehensive, low-cost business insurance protection you need and customize a policy to suit your requirements.

We shop over 50 insurers to get thousands of small business owners across Canada the liability protection they need and, in many cases, are legally required to have.

Fill out our online application for a free quote in less than five minutes.

Our team of licensed brokers are insurance experts. They can answer your questions and ensure you get the coverage you need at an affordable price.