Is Your Business Properly Insured?

As a small business owner, you’ve likely invested time and effort in finding the best insurance policies to protect your assets. However, simply renewing your existing policies without periodic review can put your business at risk.

Why Should I Review My Business Insurance?

Regular policy reviews are essential for maintaining adequate coverage for the following reasons:

• Evolving business and changing needs—Consider how your business has grown and changed since it launched. As your business evolves, so do its insurance needs. A thorough review of your policies may reveal gaps or areas where you’re underinsured. For example, insurers can cancel policies for various reasons. Changes in your business—such as new operations, employees or locations—may affect your coverage. Failing to update your policy could lead to cancellation. Additionally, some insurance types, such as workers’ compensation, are legally mandated. If you’ve recently hired employees and lack proper coverage, hefty fines may follow. Additionally, specific business activities or licenses may require insurance.
• Cost savings and efficiency—Reviewing your policy isn’t just about avoiding risks; it’s also an opportunity for cost savings. You might be paying for policies you no longer need. Regular assessments allow you to trim excess coverage. Explore bundled options that combine multiple coverages. These can be more cost-effective than separate policies.

Dangers of Being Underinsured

Being underinsured as a business can have serious consequences, such as the following:

• Financial impact—In the event of a catastrophic event (like a fire, flood or major storm), inadequate insurance coverage could be devastating for your business’s financial recovery. You may struggle to repair or replace damaged property and equipment without proper coverage.
• Legal action—If your business fails to deliver on a contract, customers, clients or employees may take legal action. Without the proper insurance coverage, lawsuits can drain your resources and harm your business.
• Noncompliance—Local, state and federal laws often require businesses to have specific insurance coverage. Failing to comply puts you at risk of penalties, fines and even license revocation.
• Reputation damage—Customer complaints, cyberattacks or other issues can harm your business’s reputation. Underinsured businesses may lack the coverage needed to handle these damages.
• Loss of business—Property damage can directly impact productivity and profits. Paying damages beyond what insurance covers could lead to personal bankruptcy for small business owners.

Business Insurance in Leesburg, VA

Contact Academy Insurance Agency to review your business insurance policy. We can make sure your business is adequately insured.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.