Small Business Minute: Are you under-insured?

By Brian Leaf

You pay your insurance bill every month. So how can you be under-insured?

If your insurance policy has been in place a number of years, chances are that no longer reflects your business.

Why? Your company has changed. The property may be worth more. There may be more inventory in your warehouse. You undoubtedly bought new equipment for the office or shop.

The National Federation of Independent Businesses says you should have annual – and in some cases quarterly – meetings with your insurance agent. These talks should be on how your risk potential has shifted.

And the NFIB says there’s more to consider than just real estate, property and equipment.

Your potential liability changes each time you add or expand services. Employees or customers may be exposed to more risk.

New locations, additional warranty work, expanded hours or other changes to operations may warrant more coverage.

Hiring more employees increases the risks of harassment, discrimination or wrongful termination suits.

And should a tornado, fire or other catastrophic event shut you down for a month or more, you may need more lost revenue insurance than you have. Without it, you won’t be able to cover lost wages, utilities and other debts.

Insurance is protection. Make sure that your policy is up to date and reflects your changing business.

–Leaf is a contributor who writes frequently about small business issues. Contact him at [email protected]