small business finance

08.27.2019

finance  |  4 min read

Insurance policies to consider as your business grows

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Emily Lazration, CoverWallet

Insurance is an essential step to starting any business. It protects you against substantial financial losses due to claims related to personal injury or damage to property. While it is recommended to revisit your policies regularly, many business owners tend to only think about their insurance when it’s time to renew or when an untoward incident occurs.

Scaling your business can mean hiring more employees, purchasing more company vehicles, renting a bigger office space, or adding a board of directors. All of these changes are positive, but they won’t necessarily be covered by the existing insurance that you've purchased before. That's why it's crucial to keep up with your insurance as your business grows.

What are some of the different insurance policies that you should consider adding - or updating - as your business grows? Read on to find out.  

Hiring your first employee

 As soon as you hire your first employee, most states mandate that you carry Workers’ compensation insurance. This policy is designed to protect your business against financial losses due to employee-related claims. If an employee gets sick or injured at work, this policy will cover the medical and rehabilitation costs. Also, it will pay for the salaries lost in case the employee needs some time to recover and cannot go back to work. 

Launching a new product or service

 Do you have a new product or service idea? Do you want to add more to your current offerings? Launching a new product or service is always an exciting time for a business, but this also can mean greater risk exposure. Here are the different policies to consider: 

  • Product liability insurance - Launching a new product leaves you open to the possibility of a product recall. Products can be recalled for a variety of reasons, including contamination, tampering, or a design flaw. A recall will not only put a dent in your finances but also your reputation.
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  • Cyber liability insurance - If you maintain a database of customer information or accept online payments, you should consider Cyber liability insurance. It’s a common misconception for business owners to believe that cyber liability only applies to large corporations, but the truth is cybercriminals target businesses of all sizes. Data breaches are making headlines almost daily, and after a breach, it takes the average business 256 days to realize their data has been compromised; after that, notification costs average nearly $200 per record that’s been stolen.
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    Adding more company vehicles

    Does the growth of your business translate to purchasing more company vehicles? This poses a higher risk including road accidents, physical injuries, and property damage. Expanding your fleet of company vehicles entails an upgrade in your policy, specifically Commercial auto insurance. This is designed to protect your business from road and vehicle-related accidents, covering the costs of necessary repairs or replacements.  

    Moving to a new office

    How exciting is it when you move into a new office? It’s a sure sign of business growth, but keep in mind you’ll need adequate coverage not only for the building itself but also the physical assets on the property. Commercial property insurance protects your business against financial losses due to lost or damaged property. Note that even if you have Commercial Property already, you should reach out to your insurance broker so that they can update the policy.  

    Creating a board of directors

    As your business grows, so will your team, which may include a board of directors. These senior members of management may request coverage against associated with wrongful acts committed in the course of their work. This is where Directors & Officers (D&O) insurance comes in. This policy protects the personal assets of the Directors and Officers within the business if the company experiences claims of theft of trade secrets, misrepresentation, wrongful and acts. Expanding your business is the result of long hours of hard work and plenty of sleepless nights. But just one claim against your company could force you to shut down for good, so don’t let all your hard work go to waste. Having the right insurance policies in place will give you the peace of mind to focus on continuing the success of your company. 

    By Emily Lazration, CoverWallet

    Emily is the Content Marketing Specialist at CoverWallet, a tech company that makes it easy for businesses to understand, buy and manage commercial insurance online. She has written for several outlets including Inc., Ooma, and Fundera covering small business news and advice.


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