The way businesses operate has changed considerably over the past few years. Hybrid working, online sales, outsourced services, flexible premises and increasingly sophisticated technology have all created new opportunities for businesses — but they have also introduced new risks.
Insurance policies that were arranged several years ago may no longer accurately reflect how a business operates today. Even if the business itself has remained profitable and relatively stable, changes in staff, equipment, premises, turnover or services could mean that its insurance requirements have changed too.
Your Business May Have Changed More Than You Realise
It is easy to think of business insurance as something that can be arranged once and then simply renewed each year. In reality, an annual renewal is a useful opportunity to look at whether the cover still reflects the business.
Perhaps the company has taken on additional employees. Maybe it has invested in expensive equipment, moved into larger premises or started selling products online. It could even have expanded into a new market or begun providing services that were not part of the original business model.
These changes can affect the types and levels of insurance a business needs.
Don’t Forget About Your Assets
Business owners often have a good idea of what their premises and equipment are worth when they first arrange their policy. Several years later, however, the value of those assets may have increased.
New computers, machinery, tools, furniture, stock and specialist equipment can all add up. If a business is underinsured, a major loss could leave it facing a significant financial shortfall.
It is therefore worth reviewing asset values regularly and making sure that sums insured remain appropriate.
Remote And Hybrid Working Can Create New Risks
For many businesses, the workplace is no longer confined to a single office or commercial premises. Employees may work from home, travel to clients or use shared workspaces.
That can raise questions about where business equipment is being used, how confidential information is protected and what happens if equipment is lost, damaged or stolen away from the usual workplace.
The right approach will depend on the nature of the business and the policy in place, which is why it is important to discuss changes in working practices with an insurance professional.
What About Online Business?
A company does not need to be a technology business to face technology-related risks.
A retailer may rely on an e-commerce website. An accountant could store sensitive client information digitally. A tradesperson might use online booking and payment systems. Even a small business may depend heavily on email and cloud-based software.
A cyber incident could result in lost data, disruption, financial loss or damage to customer confidence. Cyber insurance may therefore be worth considering for businesses that rely heavily on digital systems.
Review Your Insurance When Your Business Changes
Insurance should reflect the business that exists today, rather than the business that existed when the policy was originally arranged.
When reviewing cover, consider whether your turnover, staff numbers, premises, equipment, stock, services and working practices have changed. It can also be useful to consider whether new contractual obligations or customer expectations have introduced additional risks.
Taking the time to review business insurance could help identify gaps before they become a problem.
A growing business naturally changes over time. Its insurance should be given the same attention.
Featured image by RDNE Stock project via pexels
