Another way some people try to save money on their business insurance involves failing to report changes to their business operation to their carrier.
While this may seem like a great way to save money in the short term, it almost always ends up costing more in the long run.
Non-reporting new hires, location changes, expansions, expanded product offerings and other changes is viewed as a soft form of insurance fraud.
Not only does this strategy carry the risk of getting your coverage canceled, it is also the most surefire way to create a coverage gap in your policy. These gaps expose your operation to unnecessary risk, and in extreme cases, can end up costing you your entire business.
For example, let’s say you hired a new employee and opted not to report the hire to your carrier.
Should that employee get hurt on the job site, they would not be eligible for workers compensation under your old policy. Consequentially, they could end up suing you for the damages they incurred, easily costing you millions of dollars out of pocket.
Best practice says you should reevaluate your business insurance needs every several months.
At minimum, each time you renew your policy, you should take a serious look at how your operation and risk exposure has changed since the last time you bought coverage.
A good agent will help you through this process, making sure you are minimizing your chance of a coverage gap. The team at Tomins always performs a detailed policy review to help protect every business owner we serve when it comes time to renew.