Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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annual business insurance review

More people should ask the question “Should I perform an annual business insurance review?” rather than ignore it and continue in a daily routine. This is because a lot of people only realize the trouble they are in after a crisis.

Yet, it is important to remember that no crisis develops overnight; the troubles begin long before the eruption. It is always much easier and cheaper to catch the problems when they are starting and put a stop to them, rather than fixing the damage they cause after developing.

Find the best rates available on business insurance and protect your business. Don’t overspend on business insurance, compare insurance rates online and choose a policy that saves you money. Enter your ZIP code above to begin comparing!

Take some time out of every year to carry out an annual business insurance review to make sure that all important aspects of the business are covered by insurance and that it is sufficient to ride out a crisis. Insurance has to do with putting a stop to a major crisis before it develops.

Things to Consider

It is every business owners wish that their business will continue to grow and improve, but they fail to take the most basic step of performing an annual review.

Every business owner should take a simple self-test by asking some very simple questions: “Is the business being run in a way that will make it worth buying? If one was to die suddenly, could the business continue to function, so that the family is looked after financially or would they have to sell to pay off debts?”

Painful as these questions are, they have to be addressed and steps need to be taken to avert disaster. Carrying the proper business insurance coverage helps to do this.

Small businesses need protection from many different angles and each has to be considered carefully. Each different factor has the potential to ruin a business that may have taken years to develop. It is important to consider each of the following when considering business insurance.

  • Public liability
  • Employers’ liability
  • Professional Indemnity
  • Office contents
  • Legal costs
  • Personal accident
  • Business interruption
  • Buildings

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Annual Reviews

Many business owners make the mistake of purchasing insurance and then renewing policies without the trouble of going over them and adjusting them according to needs. Businesses do not stand still; every year they experience changes. Regardless of whether these changes are major or very subtle, they are there.

For example, one may have added a single piece of machinery in the course of the year, or they may have lost a single contract. All these changes need to be reviewed annually and the insurance needs adjusted accordingly. If

business insurance review

one only shops for coverage once in a few years, they will not know if the premiums they are paying are competitive or the coverage is sufficient.

By shopping around, one can learn about the basic options of commercial liability insurance available and any new products being offered to select one that is most suitable. Small and medium-sized businesses are classified in the “low risk” category by insurance companies, and as such might qualify to buy this low-cost package of policies called Business Owner’s Policy (BOP). They include the most important business insurance policies at competitive rates.

  • Protection from bodily injury or property damage are covered in the Commercial General Liability.
  • Protection of the business physical assets if covered in Property Insurance.
  • In some cases, BOP can also provide protection against lost income or other expenses that the business owner may incur.

Cyber Threats and Insurance Reviews

Sometimes it is not the changes in a business that require insurance reviews, but dangers posed by external forces that require a company to make changes. The ever-growing issue of cyber threats insurancecyber threats is making it difficult for business to remain secure and to stay ahead of the danger businesses. That is why they must re-evaluate their security tactics on an annual basis. Since cyber espionage poses a very real danger, business insurance policies need to be updated so strong protection is available if needed.

Companies can protect their computers by imposing strict staff use of computer policies or constantly updating dedicated software. But cyber threats are continuously changing and being completely protected is not possible by these means alone. The only sound policy available to companies is to review business insurance policies and make certain they contain sufficient protection for costs due to problems that may arise out computers systems being attacked. A company may find it necessary to purchase cyber liability insurance for their business.

Economic Conditions & Insurance Reviews

Economic growth and recovery from the recession has not been up to the mark initially indicated. It is obvious that due to this there is lower consumer spending that is expected to continue for the time being. In light of this, small and medium business will continue to experience low turnovers. This is another reason firms would be wise to take a look at their business insurance policies and adjust them according to the prevailing economic conditions.

Business insurance should be a much higher priority for businesses as it can provide significant protection against loss of accounts receivable in cases where clients become insolvent or file for bankruptcy.

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Conclusion

Insurance companies make mistakes just like everyone else and annual reviews can help to eliminate those. One marketing company found that some of their employees were misclassified when renewing their insurance coverage; the agency found the mistake and ended up saving the company some money. If policies are not reviewed annually, the mistakes can carry on for years, costing the company dearly.

If annual reviews are not being carried out, it is a good idea to start as soon as possible. Get in touch with a number of different companies and shop around for the best prices. There is nothing to be gained by holding on to the wrong policies, but the potential for loss is definitely there.

Compare insurance quotes online right here. Simply enter your zip code below and begin comparing quotes from all the major insurance providers!