Expert Advice
A Risk Management Guide for Marketing and Management Consultants

Chapter 3: Tips for Finding Small Business Insurance
Part 3: When to Update Your Business Insurance Policies

As your marketing or management consulting business grows and changes, you may need to amend your insurance policies so they can keep up. Most small business insurance policies come with a clause that allows you to alter your coverage when a "significant event" occurs, even if it's in the middle of your coverage year.

That way, you don't have to worry about insufficient coverage. Here are some instances when you'll want to revisit your insurance policies and adjust them to your business's new needs:

  • When you get more clients. When you take on more clients, you take on more opportunities for E&O or General Liability lawsuits. So if you're taking on double the amount of work than you were in previous years, it may be time to reevaluate these plans and increase their limits.
  • When you change premises. If you relocate to a bigger commercial space, you may need to assess a few of your plans. Your General Liability and Property Insurance plan must cover your new location. Be sure that your Property plan also accounts for your new building's contents, fixtures, and furnishings.
  • When you offer new services. Check your Professional Liability policy to make sure it covers your new services. If your policy doesn't cover your new offerings, be sure to talk to your insurance agent about options for tailoring your plan.
  • When your revenue significantly increases or decreases. As we've mentioned before, your insurance premiums and limits are based on several factors, including your business's revenue. If your income makes a steep incline or decline, your insurance needs will inevitably change. For instance, more revenue means you have more financial assets that need protection. That means you may want to raise your coverage limits for more security.
  • When you hire employees. A sure sign that your business is taking off is when you can hire staff members. However, when you have employees, you're responsible for protecting them. For instance, most states require employers to carry Workers' Compensation Insurance, even if you only have one or two employees. You may need to cover your employees under your Professional Liability plan, too, just in case a client sues your business for an error your employee made.

If you have any questions about changing your policies or about small business insurance, talk to an insureon agent. We're happy to get your business on the fast-track to success!

Next: Chapter 4: Managing Risks as a Marketing or Management Consultant

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