An annual business insurance review is a key step in ensuring financial stability for any company. For small businesses — which often nimbly evolve to adapt to changing times and to the needs of their clients — it’s an especially critical practice.
So, it’s a good idea to set aside time every year to work with your insurance agent or broker to determine if your current policies are still providing the correct protection your business needs.
Why Is Doing a Yearly Commercial Insurance Review Important?
Businesses change. Yours may be experiencing staff growth; changing gears (literally) to switch over manufacturing to a new market-driven product; or selling off an underperforming property. These types of adjustments can expose a business to new risks and impact insurance coverage needs, sometimes dramatically.
A yearly business insurance review can help ensure:
Your business has adequate protection. In the case of a major accident or loss, being uninsured or underinsured can potentially mean financial disaster. Adding new locations, buying additional equipment, moving to a fully remote workforce, or even just installing more robust software for ecommerce may require additional policies or increased property or liability coverage limits.
Checking your insurance coverage regularly can help identify dangerous gaps in coverage and prepare your business to bounce back quickly from a disaster.
You’re not overpaying. Some changes to your company may mean it needs less coverage in specific areas. For example, staff reductions due to automation may mean less workers’ compensation insurance is required; or the installation of fire or water damage prevention measures may qualify you for premium discounts.
Making sure you’re not continuing to pay for coverages the business doesn’t need can help your bottom line.
How Do I Prepare for a Business Insurance Review?
In your review, you’ll likely cover key aspects of your business and any important updates, as well as your current insurance policies to see where changes might be warranted.
Before you meet with your insurance professional, it’s a good idea to gather pertinent information about any company changes over the past year. Some areas to think about are:
Ownership and management. Have you changed the tax structure of the company or brought on new senior leadership or board members?
You may want to consider adding or updating your Directors & Officers (D&O) liability policy.
Clients and suppliers. Have you onboarded a significant new client that might impact your insurance obligations (e.g., through client service contracts)? Do your client contracts or your own needs require additional protection against supply chain weaknesses?
Legal obligations within the supply chain can be complex. But whatever end of the supply chain you’re on, an insurance review can help you identify potential risks and liabilities.
Staff. Have you increased or decreased your workforce? Do you have temporary employees onsite or using your vehicles?
Check that your workers’ compensation and commercial auto policies provide adequate coverage for your updated needs.
Properties and vehicles. Have you increased or updated your delivery fleet? Have you bought, sold, or made major improvements to properties or plants?
You may need to increase the limits on your property insurance. Alternatively, you could save insurance premiums on buildings that were sold or vehicles that you took out of service.
Products and services. Have you evolved or expanded your offerings to clients? Have you changed how you handle client data?
Your expanded product line or suite of services may expose you to new or increased risks — and necessitate strengthening your cybersecurity, product liability, or Errors and Omissions (E&O) policies.
If it’s been more than a year since you’ve reviewed your business insurance, now is a good time to make an appointment with your insurance agent.
This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.
Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at
www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.
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