How Your Business Size Affects Commercial Insurance Needs

Every business must account for specific risks and exposures. However, businesses also have unique circumstances that greatly impact these concerns and subsequently shape their risk management and loss control measures. Your business’s size may be significant to account for, as it may heavily influence your commercial insurance needs.

What Does “Size” Mean in the Business World?

You should first understand that the term “size” may refer to several different metrics in the business world. Therefore, many aspects of your company may need to be considered and discussed with your insurance agent. Specifically, consider how the following may impact your commercial insurance needs:

• Workforce size—Your company’s number of employees may be a key consideration when determining coverage needs. For instance, businesses with at least a certain number of employees may be legally required to carry workers’ compensation insurance. Furthermore, the size of your staff may also influence how much coverage you need.
• Company assets—The value of your business’s tangible and intellectual property should be fully accounted for when assembling your commercial insurance. As a general rule, the more valuable your assets are, the greater the amount of coverage you’ll need. Without sufficient policies, you’d potentially be left to pay for rebuilding your offices or replacing key equipment out of pocket.
• Business revenue—You should generally expect to need more insurance if you make more money. For example, business interruption insurance, also known as business income insurance, can compensate you for lost revenue if a covered incident disrupts your operations. However, these policies have limits and the more you expect to make, the more you could potentially lose by having insufficient coverage.
• Locations—When considering your coverage needs, you may also need to account for where you operate and how many separate places of business you have. Many states and jurisdictions may impose location-related coverage needs, potentially leading to noncompliance fines and other penalties should you fail to appropriately assemble your commercial insurance portfolio.

We’re Here to Help

Contact Bovard Insurance Group in Prairie Village, Kansas, to learn more about the relationship between business size and coverage needs or compare personalized commercial insurance quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.