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Insurance Check-Up

The fourth quarter of the year is typically focused on preparing for the holiday rush in retail, ending the year on a strong note for deliveries before the end of the year to count in this year’s revenue target, and starting to think about new initiatives for the new year.  In that frenzy of action and activity, there is another task that is worth spending some time addressing that has likely been neglected by most business owners.  That issue is – insurance.

Stress Tests and Check-Ups

Physicians and healthcare providers are clear on communicating the benefits of annual physicals and conducting various regularly scheduled tests to assess our personal health.  Depending on the results of those tests, there are often recommendations made to change one’s personal habits, identify concerns or warnings, and sometimes various interventions or therapies.  However, for many business owners the approach taken to determining their insurance needs and coverage is vastly different.  The initial effort to purchase insurance when the company was first started, or perhaps when there had been some significant event in the past (bringing on employees, opening up a second location, moving the office, etc.) is now an ancient memory.  The belief that insurance is a one-time decision can be very costly to the business on different levels.  Just like disease states or changes in our own personal lifestyle/lifestages can create different needs in our own healthcare, the same evolution is seen in business insurance needs.

Annual Insurance Assessment

Most business people do not eagerly look forward to shopping for insurance and don’t often see it as being as high a priority as closing the next deal, tracking the latest shipment, or deciding on the merits of which job candidate to hire, etc.  However, by not remaining aware of changes in their insurance needs, costs of new insurance options, or reviewing their current policies, businesses can be making a huge mistake!  Therefore, it is advisable to take the policy out of the filing cabinet where it likely was placed and forgotten, and have it reviewed by your insurance agent.  Neglecting to do so may lead to trouble at the exact worst time – when disaster occurs (floods, fires, accidents,law suits, etc.).

Failing to review insurance needs can be the same as burning dollars.

Failing to review insurance needs can be the same as burning dollars.

For instance; when key employees are hired (or leave), new sites are opened, employees are provided cars, new equipment is purchased, etc. – the implications for insurance can be impacted.  As the business expands or contracts, there are changes that need to be reflected in insurance coverage.  A review of common triggers for insurance needs can be found in an article on the website, Enterprise Nation – however, it is essential to not assume that because something was once appropriate, it remains appropriate for too long into the future.  Business needs are very dynamic and need to be reviewed frequently.

Cost Implications

To be sure, ignoring the insurance needs of the business may prevent you from saving money. Like many businesses, insurance is a highly competitive industry in which industry competitors are always developing incentives to attract new customers. While it may not be necessary to put the company’s insurance needs up for bid to all competitors each year, it is worth having an annual conversation with your agent to make sure you’re up to speed on offerings.  Each year, there may be optional features that the typical customer may not be aware of—unless he or she saw the commercials on television, or talked to an agent.  In the best situation, your agent (or multiple agents if you work with multiple companies each providing a different specialized insurance) will conduct the annual review and alert you to any discrepancies, changes, or cost-savings opportunities for which you may qualify or be eligible. A smart business owner would not wait to hear from their agent though – they would initiate the call and request it!

It’s a simple process but far too many people don’t think about it until they have a claim. That’s when they find out something wasn’t covered. To avoid this trap, educate yourself about your current policy and how to add or remove coverage based on your individual needs.



David Zahn