Without a doubt, all businesses do not come from the same mold. Not only do businesses differ in terms of industry or niche, but they also differ substantially in terms of size. There are the small mom-and-pop businesses at one end and the large Fortune 500 businesses at the other end. Since the commercial coverage needs of the average mom-and-pop business in Southborough won't match the coverage needs of a Fortune 500 company, small business insurance was conceived to help provide affordable protection to the small businesses.
However, many small businesses don't remain tiny forever. This means, at one point, you may need to scale up your business insurance to better meet the needs of your growing enterprise. Here is some information that should help you determine exactly when you should scale up the insurance for your small business.
When is the Right Time to Scale Up Southborough Small Business Insurance?
As your small business grows, it can be difficult to determine the point at which your insurance has become insufficient for your coverage needs. The best indicator that you need to scale up your small business insurance is if your enterprise has experienced a substantial growth or change in capital. The main types of capital include human capital and manufactured capital. Depending on your industry or niche, social capital may also be relevant when it comes to your coverage needs.
Increasing Human Capital
Human capital refers to the economic value that your employees are able to provide to your Southborough business. As you attract more customers and clients and the need to produce and distribute your products and services grow, you will need to hire more employees to keep up with the growth in demand. However, hiring more employees means a boost in the human risk posed to your business. For example, if one of your employees are injured while on the job, you may have to deal with lawsuits, which can ruin you financially. Also, no matter how hard you work to maintain a positive and honest working environment, theft and fraud is always a possibility.
Increasing Manufactured Capital
Manufactured capital refers to owned material goods and infrastructure. Some examples of manufactured capital include buildings (property), tools, technology, and infrastructure. While it is necessary to increase your stock of manufactured capital to keep up with the growing demand for your products and services, the growth in manufactured capital will increase risk. Material goods and infrastructure can be stolen, damaged, or vandalized.
If brand image is incredibly important to the success of your business, you may need to scale up your insurance in case you face slander and libel at some point.
Determining Your Need for Southborough Small Business Insurance
Without a doubt, one of the best ways to gauge your protection and coverage needs is by conducting risk assessment for your small business. Going through the risk assessment process will allow you to pinpoint every single risk that may threaten the success of your small business. It will also help you differentiate the risks you can control from the risks you cannot. That way, you will be able to determine which risks will need the back up of business insurance to help serve as protection.
As your enterprise grows and flourishes, you may have a hard time determining when you should scale up your small business insurance. Fortunately, the tips discussed above should help you properly gauge the insurance needs of your prospering Southborough business. You should consistently touch base with your local insurance agent to check up on your company and its coverage.