Is Your Business Insured for Growth?

As your business grows, so will your business exposures. A robust insurance package can help you control these risks and avoid unexpected expenses. Don’t wait until you’re hit with a claim to discover you don’t have the coverage you need. Use the tips below and meet with an insurance advisor to determine whether you’ve sufficiently insured your business for growth.

1. Taking on (More) Employees

Small business owners often start out by running their businesses on their own, but as they grow, they need to hire employees.

Hiring brings substantial risks. In addition to complying with state workers’ compensation insurance requirements, employers need to navigate state and federal employment laws.

Claims of discrimination and harassment are common – in 2022 alone, the EEOC received 73,485 new discrimination charges. Employment practices liability insurance (EPLI) provides important protection. According to IRMI, EPLI most frequently covers claims involving wrongful termination, discrimination, sexual harassment, and retaliation up to policy limits.

Hiring can create other exposures as well, like the risk of employee theft or the risk of an employee harassing a co-worker or a customer.

2. New Locations or Renovations

Eventually, your business will outgrow its current location. You might move to a bigger building, add new locations, or renovate your current location. Regardless of the choice you make, you’ll need the right commercial property insurance.

For example, if you renovate your property, its value will likely increase, which may require higher limits. Renovations can also impact the risk level of your property. If you buy a second property, you’ll need coverage for that location as well.

You’ll also want to consider business interruption exposures. If property damage could prevent your team from operating, you’ll want coverage that includes business interruption insurance.

3. Growing Inventory, Supplies, and Equipment

It’s not just your business’s real estate you need to consider – you also need to think about coverage for the various items your business owns, including inventory, supplies and equipment. The volume of these items will grow with your business, meaning your old insurance limits may no longer be sufficient.

4. Intellectual Property

As your business grows, you could face disputes over intellectual property. For example, your competitors may infringe on your trademarks. Conversely, a rights holder could accuse your company of infringing on their copyrighted material. Intellectual property insurance can help with defense costs if your business is sued for infringement as well as legal costs if you need to file a lawsuit to protect your company’s intellectual property.

5. Increased Liability

Virtually all businesses have cyber exposure and must be mindful of ransomware, phishing, social engineering and other hacks. If you collect and store personal information, you also face the risk of data breach.

In addition, your growing business has greater exposure to both real and fraudulent claims of many types. For example:

• If you welcome members of the public into your place of business, people can slip and fall on your premises.
• If you perform work offsite, claimants can say that you damaged their property.
• If you provide a professional service, you might be sued for a mistake, error or omission.
• If your team drives on the job, motor vehicle accidents can occur.

This is just a short list of the many types of liability your business could encounter. To protect your company from both founded and unfounded lawsuits, you need adequate liability insurance. Depending on the type of work you perform, you may need commercial general liability insurance, professional liability insurance or both. You may also find that you need an umbrella liability policy to extend the limits of your underlying liability policies.

6. Have You Spoken to an Insurance Advisor Recently?

Every business is unique. An insurance agent can help you understand your risks and the coverage options available. If you haven’t spoken to an insurance agent recently, consider reaching out to discuss how your coverage needs may be changing as your business grows. Find an agent.