The House Insurance Built
Risk Management for Builders & Contractors

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

Now that you know how to secure your small business insurance protection plan, it's important to realize that your insurance needs are not stagnant. As your business changes and grows, your insurance policies may need to be adjusted. Sometimes, something will happen and you insurance will need to be amended in the middle of your coverage period.

[A photo of a team of construction workers, posing for the camera]

Don't worry. Insurance policies usually come with a provision for these "significant events" that allows you to make changes to your coverage in the middle of the year. What's considered a significant event? Take a look at the following:

  • Purchasing new equipment. If you purchase heavy machinery or expensive tools, you will want to cover your investments with your Property Insurance or Inland Marine Insurance policy. As a rule, any big purchases are worthy of a policy update, because your premiums depend on the type and amount of hardware and equipment your business uses.
  • Relocating your office. If you relocate to another commercial building, your move will affect your General Liability and Property Insurance plans. For instance, your GL Insurance will need to cover your new address if you have premises liability protection. And your Property policy will need to cover the building (if you own it) or its contents (if you rent). The square footage of your new space, its security features, and where it is located can affect your Property premiums.
  • Offering new services. Because most of our policies are industry-specific, it's a good idea to double check that your new services are covered by your existing policy. If they aren't, your agent can advise you on the endorsements you may need to add to your plan.
  • Having a significant change in revenue. Because your premiums are partly based on your income, you may need to revisit your plan if your earnings double or they take a sharp dive. If you're pulling in more revenue, you may need higher limits to protect you if you're sued. If you're generating markedly less income, you may be able to save money on your policy by reducing your limits.
  • Hiring employees. Though we already discussed in how your insurance needs change when you hire employees, let's recap. Most states require that construction employers carry Workers' Compensation Insurance for even one employee, so that will be your biggest change. Remember that most states allow you to cover yourself with this plan, too.

Should one of the above events alter your business, contact your insurance agent right away. If you wait too long, you may no longer have adequate coverage. And you never want to leave your business vulnerable to risk.

Got questions? Our insureon agents are happy to help you navigate your insurance needs, no matter the stage of your business's growth. Give us a call today!

Chapter 4: Risk Management for Contractors and Small Construction Businesses

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