Running a small business or starting a new one in Northborough, often requires your full attention just putting out fires or dealing with new growth. Not surprisingly, many business owners fail to take into account these changes and how they might affect their small business insurance.
How Do Business Changes Affect Small Business Insurance in Northborough?
Changing the Structure of the Company
Many small businesses start out as sole proprietorships, which work well until they experience substantial growth. If your business changes over to an LLC or a corporate classification, you might need to discuss these types of structural changes with the insurance company, which could affect your small business insurance in Northborough.
Services or Product Production
Most new startups begin with a business plan, which helps to determine their goals, products, and services. However, many new businesses find that they will add several new products and services as they grow. For instance, you may run a small restaurant and later expand to making deliveries or making menu changes. These changes could warrant looking at business auto insurance or spoilage and contamination coverage.
Or, you may experience an increase in product production. Storing extra goods may require adjusting property coverage to account for extra inventory.
Expanding or Moving to Another Business Location
Any type of a move to a different area could require insurance changes. An increase or decrease in square footage and the age of a building could impact coverage. Moving to a building with a security system could reduce insurance costs. Choosing to move to another business location with less crime could result in a lower premium.
Purchasing or Upgrading Equipment
In most cases, as your company grows, you’ll be buying more equipment, computers, or making upgrades to existing equipment. All of these factors increase the value of property for insurance purposes.
After buying additional equipment, it’s a smart idea to inventory these upgrades and purchases for your insurance company. By providing documentation and pictures of new equipment, your insurer can work with you to make the necessary adjustments to increase limits on policies or check your coverage amounts for theft, fire or some natural disasters.
Personnel May Affect Small Business Insurance in Northborough
Adding or decreasing employee head count may have an impact on a couple of types of insurance coverages. For example, if you’ve hired new employees, you might need to increase your liability coverage limits. Any new drivers would need to be added to your business auto insurance.
In addition, if they are hired as employees and not independent contractors, you’ll need to see they are covered under workers compensation insurance. Firing or losing employees may also reduce insurance costs or require coverage changes.
Once a small company begins to increase revenue and make a profit, their overall business value will increase. Consequently, this may mean that liability limits should be set higher and property coverage as well to ensure the company has enough coverage.
Unfortunately, if profits decrease or there is a downturn in business, you may need to revisit your insurance policy to determine if you need to readjust limits.
Any kind of changes or substantial growth in a Northborough company could impact the type of coverages you require and your policy limits. Reviewing and updating your small business insurance policy periodically helps to assure that your policy is keeping up with company growth.