Making Your Small Business Liability Insurance Relevant For The Future

As per preliminary June employment statistics, the economy seems to be showing signs of growth in many areas (although it is, undoubtedly, still struggling in most of them). Furthermore, with small businesses displaying the largest growth in new jobs generated, it means that now is the perfect time to re-evaluate your liability insurance requirements if you own a small business. The current insurance coverage was probably more than appropriate for the quantity of employees, volume of on-site foot traffic, etc. that were part and parcel to your business throughout the Great Recession of 2008-10, but it may no longer be enough as you widen your scope in a period of expansion.

Making the decision as to whether or not your insurance plan affords the appropriate amounts of protection for your projected growth calls for a little bit of guess work, but there are some key variables that, once examined, provide you a reasonable idea of where your firm stands. Should you expect to see a rise in exposure as a result of a change to any of these aspects which impact your business, then you might want to think about expanding your coverage:

New Legislation

Due to the turbulent political and financial environment we are in, there's an ever-present potential for huge changes in guidelines that affect liability insurance for small business owners. Stay aware of developments in legislation that have an impact on your organization, and find out if any of them raise your liability.

Number of Employees

Do you expect to grow your staffing as a result of an expansion in your business? If you do, then this is a second change that would raise the level of liability coverage you should have. Many small business proprietors give minimal consideration to how fluctuations in the size of their labor force impact their liability, but exposures linked to employees are a major factor in setting your premium and insurance deductible.

New Services or Products

If a revitalized business environment has encouraged you to begin offering new products or services, make sure you review what these additions to your portfolio entail, and make certain that they aren't creating new liabilities outside of your existing policy. As an illustration, if you run a small restaurant and have opted to start featuring home delivery, make sure that your general liability insurance policy contains the appropriate coverage for workers and motor vehicles.

Enlarging Your Physical Property

Another common adaptation that companies make as they increase in size is transferring their operations to a larger property, or increasing their present one. Even as all the extra room offers more room for serving clients, storing inventory, etc., it also adds a lot of liability. It is important to keep this in mind, and adjust your policy as necessary.

A Few Final Thoughts

Unfortunately, general liability insurance for small business entrepreneurs isn't a thing that can always remain fixed during the entire life of the plan. Because your business adjusts, so too will the liabilities it will face. Through keeping aware of this basic fact, however, you can modify your coverage to satisfy your changing needs, and guarantee that your business will continue to develop and be successful for many years into the future.

By: Darin Mendanor

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Darin Mendanor is a long-time member of the insurance industry and ardent supporter of small business. Over the course of his 15-year career, he has specialized in liability insurance for small business, and commercial general liability insurance.