When Is It Necessary to Get Insurance?

Insurance is the kind of service that no one wants to invest in when business is good but is sorely needed when things go poorly. Working with general liability, business, and cyber insurance companies may feel like a hassle, but having the right coverage is essential to keeping things running smoothly. It may even be illegal for your business to continue operations without coverage at all! Luckily, there are many opportune times for your company to get prime coverage with as little headache as possible.

Renew Your Interest

Like any service plan, your insurance policy will one day expire. While it may be easiest to simply renew right away, this is the time to take stock of your current coverage. Businesses change the way they operate, and even small shifts in staff, budgeting, and products add up over time. Some of the insurance types you should consider adjusting include:

  • Liability Insurance: General liability policies cover all of the basics, such as accidents, injuries, and negligence. Business-level coverage is essential for home offices since homeowner’s policies rarely include business-based incidents.
  • Cyber Insurance: Provides coverage against data-related theft and breaches, a necessity as data becomes more important to your operations. Contact cyber insurance agencies to find a policy that works well with your business.
  • Umbrella Insurance: When basic coverage fails, business umbrella insurance can pick up the slack. Instead of losing capital when you need it most, these policies can help you avoid costly out-of-pocket expenses that can cripple operations in the short term.

Renewing your policy is a great time to make these adjustments since there should be no costs associated with restructuring insurance contracts. Making this an annual affair will also help make sure you’re not wasting funds on unnecessary coverage.

Hiring/Laying Off Employees

Whether business is booming or you’re restructuring the organization, large changes in employee population may mean it’s time to reassess your insurance policy. There are several types of coverage that staffing changes can affect, such as workers’ compensation coverage and general health insurance needs. Some states even require specific types of insurance if you hire a certain number of employees, so you’ll want to check if you’re close to that threshold.

Another important factor to consider when making employee changes is professional liability insurance. Also known as “errors and omissions,” this category of policy is excellent for doctors, accountants, and architects who work in fields where personal error can cause huge problems. Cyber insurance companies are also invaluable since identity theft may become an issue as more staff joins the company role call.

Offering New Product Lines

Adding new products or services to your offerings may help draw in more business, but it can also lead to legal problems. No product launches flawlessly, and those initial speedbumps may become costly down the road. A new product can also change how you manage inventory, equipment needs, and employee concerns. You’ll want to make sure property and liability insurance covers any new facilities needed for the product as well.

It may also be a good idea to update your product liability insurance as well. If a new product has unforeseen safety issues, your business will be liable for injuries or other damages. Having coverage specifically for those items protects manufacturers, distributors, and wholesalers from these accidents while your company tries to correct the issue. Even software and tech companies benefit from this coverage since apps and programs may interact with customers’ devices in unexpected ways.

Restructuring and Relocating

A change of scenery can be very beneficial to your business, and it’s also a great time to reassess your insurance coverage. Making big changes with your equipment and property means you’ll need to make adjustments to your coverage options. Times to consider updating your property insurance may include:

  • Moving to larger offices
  • Adding to the existing structure
  • Renting off-site warehouse facilities
  • Reinforcing network and IT infrastructure
  • Restructuring the flow of manufacturing

You may also be forced to make transitions thanks to natural or man-made disasters such as fire, infestation, or the pandemic. Having business interruption insurance can be a lifeline in those scenarios. Being able to pay rent, payroll, and other necessary expenses when business is at a standstill can keep your business afloat until you can get everything back to normal. Cyber insurance companies should also be contacted since businesses in transition are prime targets for data theft.

The Best Time Is Now

When it comes down to getting insurance to cover your business, the sooner is almost always the better. There’s no telling when an accident or disaster may be just around the corner. If you’re caught without the right coverage, it’s your employees and customers that will suffer. Make sure your company has the coverage it needs so no unforeseen incident can get in the way of its success!

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