To many business owners, insurance is just a necessary evil. Perhaps your bank requires it, or your landlord, or a vendor or a contractor. You call an agent, get a quote, pay the premium and then get back down to business.
While some businesses may be able to get away with this “set it and forget it” mentality, the vast majority of businesses should contact their broker when business changes occur. What sorts of changes should trigger a phone call? Let’s look at a few of them.
When Buying or Selling a Vehicle
While most commercial auto insurance policies do offer automatic coverage for a newly purchased vehicle, this coverage does have a time limit, usually 30 days or less. You must notify your insurance broker as soon as possible of a newly purchased vehicle to receive an auto insurance ID card. This will be required to register the vehicle and in the event of traffic stops or accidents.
When selling a vehicle, you should notify your broker in a timely manner in order to reduce your premium payment. Many insurance companies will not endorse a vehicle off the policy more than 30 days after the sale but will endorse at the date of notification. You could be leaving money on the table by failing to notify your insurance carrier.
When Hiring or Firing
It is in your best interest to notify your insurance broker of any major changes in payroll resulting from layoffs or hiring. While most Workers Compensation policies are audited annually, a mid-year change would help offset an increase in premium at year-end.
When Leasing or Purchasing New Equipment
Whether it is a crane or a copy machine, it is a good idea to notify your broker when you are making a new purchase or leasing a new piece of equipment. Your business personal property limit may not be adequate to cover new equipment. If you have inland marine coverage, you should check with your broker to be sure that your limit is adequate to cover newly purchased or leased tools and machinery.
In addition, financed or leased equipment may require insurance coverage. The finance or leasing company may force-place insurance coverage if you do not provide proof of insurance. You may be paying twice for insurance on the same piece of equipment.
When Going Offsite/Moving
Your liability and property policies may limit your coverage to a specific location. Taking work offsite for a trade show, fair, convention or other special events may mean no coverage for your work product, your equipment or your employees.
If you move, you should notify your broker as soon as possible to adjust mailing address, location address and any changes associated with the move.
When Expanding Your Business
Your insurance policy will typically limit coverage to your main business pursuits, or those work processes that you told your broker about when you bought the policy. If you decide to expand your businesses beyond the norm, your policy may not offer coverage.
For example, if you are lawn care company, your policy will cover whatever you do that is related to your lawn care business. Should you decide to expand your business to cover tree trimming, pool cleaning, or feral animal removal, your policy will not offer coverage unless you inform your broker and insurance carrier.
Business expansion doesn’t have to mean the end of your insurance policy. It just means you may need to modify your current policy. Proper insurance coverage is important to protect your business.
In addition, if you are expanding your business online or into the realm of social media, you should speak with your broker. Online selling or advertising can be a great way to make money, but may also expose your business to greater financial risks.
When You Have a Claim
Insurance is there to protect your business in the event of a claim. Should your business experience a fire, theft, customer injury, auto collision, employee injury or any other business setback, you should call your broker. That is the real reason you purchase insurance!
Talk to a Hayes Broker today to schedule a free, no-obligation risk management analysis to discuss your current business needs and future plans. We are here to help.