When you first buy insurance for your business the terms and conditions (including premiums) are determined by your business’ risk profile. The risk profile takes into account factors such as your occupation, number of staff and level of turnover. Needless to say however, things do change. Hopefully, your business goes on to attract more customers and you take on more staff or incur costs to keep things moving along. So if you’re considering buying insurance for the following year, make sure that your cover reflects your businesses current risk profile.

1. Take stock

Have you bought any big-ticket items during the year, like commercial fridges or machinery, electronic equipment or stock? Or have you renovated your business premises during the year, increasing your revenue?

Depending on what level of insurance you purchased, some of your purchases may already be covered where as others may need to be declared to the insurer in order for them to be covered – check your policy wording or “PDS”. Also, if you happen to have purchased business interruption insurance, those increases in revenue may not be protected for example if you suffer a fire and are unable to conduct business for the next 3-4 months.

2. Consider your business needs and growth

Will you be purchasing a greater level of stock during the year or take on different types of clients? For example, will your new clients require you to purchase $20 million in public liability cover rather than your current $10 million? In providing services to new clients will this change the nature of your operations? Will you move from wholesale to retail or wholesale to manufacturing for example?

Changing the type of business that you are engaged in will almost certainly change the type of insurance you need as well as the terms and conditions that you are offered. In fact most insurers will provide a business services description on your insurance certificate meaning that if they find that you were providing legal services and not accounting you might end up with nil cover. Indeed, insurers will quite often refer to your “duty to disclose” any information that may change or affect their decision to insure you when you first apply for insurance. This means that if there is something that you fail to declare and that a claim results because of that something, your claim may well be denied.

3. Talk to someone

So you’ve taken stock of your business assets and inventory and you’ve considered your business needs and growth aspirations. What next? Well, talk to someone about it. If you buy your own business insurance direct online or through a call centre then your best bet is to speak to your insurance company. It may be unlikely that they will give you advice so in that event you should speak to a qualified insurance professional such as an insurance broker.

Your broker will be able to suggest alternative insurance companies which may work in your favour – but just be mindful of the cost of this advice: for example commissions that they will receive from the insurance company for selling their business insurance products to you or the ‘risk management’ fee that they may charge you in addition to the premium (which includes their commission).

Of course, if you don’t know where to start, check out one of our quick guides on business insurance!