AS 2021 gets underway and while you’re making New
Did your properties change? Did you buy or sell any buildings?
Year’s resolutions, you should also resolve to review the
Lease new ones? Add on to or upgrade any buildings? Buy new
state of your business’s insurance program.
equipment? Make sure your insurer knows about these changes.
AS 2021 gets underway and while you’re making New Year’s resolutions, you should also resolve to review the state of your business’s insurance program. The best way to do that is to start by reviewing your
Some property insurance policies provide limited automatic
enterprise’s activities in the past year and how they may affec
coverage, but only for 30 days or so.
your insurance policies in the new year. What you find as you go
Also, the amounts of insurance on your properties
through the following checklist may surprise you.
should reflect the cost of replacing them. If your building
Did your operations change last year? Workers’ compensation
is 30% bigger than it was this time last year, you may be
and commercial general liability (CGL) insurance premiums are
underinsured.
based in part on the type of work your business does .
Did your auto schedule change? If you have sold, replaced
If your business changed, the insurance company may revise
or added any vehicles, make sure your insurance company
how it classifies your operations when it audits your records. This
has an up-to-date list of all vehicles.
could cause your premiums to increase; inform the company
Do you need new or additional insurance? Could you
now to avoid a surprise later.
afford to pay for legal costs, settlements, penalties, lost
Did your payroll and sales change? These premiums are also
income and recovery measures if you were sued over a
based on the amounts of your payrolls and sales. Employment
network data breach or suffered a ransomware attack? If not,
practices liability insurance premiums are based on the number
you may need cyber insurance.
of employees.
Could a client sue you for alleged errors or omissions in your
If you had a good year and these numbers increased, expect
work? If so, you might need professional liability insurance.
to pay additional premiums at audit time.
Also, you may need greater amounts of general liability
Conversely, if both shrunk, ask your insurer to reduce its
and automobile liability insurance, especially if you work for
estimates so you can get the return premium now.
other firms. They often require their vendors and contractors
Did you acquire, form or sell any businesses? CGL policies
to carry high insurance limits. You may need a commercial
typically provide short-term coverage for some newly acquired
umbrella liability policy for additional amounts of insurance.
or formed entities. After 30 or 90 days, that coverage disappears
unless you report the new entities to the insurer.
The takeaway
Workers’ comp policies do not automatically cover a new
You’ve worked hard to build your business, and your work
entity. If your business and the new entity have common
deserves protection. By using this checklist, you will get a good
ownership, you may be able to add that entity to your policy,
start on protecting what you have while you work in 2021 to
but you must report it to the insurer.
make it grow.
