Is 2019 shaping up to be a more profitable year for your company? Congratulations! Reaching new revenue milestones, especially the $1 million mark, often brings shifts in how your business is insured. As your revenue grows, your business becomes a larger target for insurance claims, and it’s important to adjust your coverage accordingly.
At Swarts Manning & Associates, our insurance design specialists help fast-growing companies customize cost-effective insurance programs that address future risks. Here are five key ways insurance may change as your revenue skyrockets:
- Multiplying Revenue Lowers Insurance Premiums
- One of the first areas to examine is your balance sheet. Are your revenues and losses strategically stated? Insurance premiums are often expressed as a ratio, and our specialists work with your CFO to optimize coverage and potentially lower premiums based on your financial standing.
- More Employees Means More Coverage
A growing workforce can lead to more employee-related claims, including discrimination, harassment, or workers’ compensation claims. As your business surpasses 50 full-time employees, ACA laws mandate that you offer ACA-compatible coverage. We recommend Employment Practices Liability Insurance (EPLI) to help manage claims from current, former, or potential employees.
- Better Talent Necessitates Better Benefits
As you attract better talent, you may want to enhance employee benefits. Employee Benefits Liability coverage protects you from errors or omissions in benefits administration. Our employee benefits team can help create a competitive package to attract and retain top talent.
- Higher Valuation Equals Higher Target
With a rising valuation, your business may become a bigger target for criminal activities like embezzlement, cyber attacks, and data breaches. Consider adding Commercial Crime, Employee Dishonesty, or Cyber Liability coverage to your risk management plan to help mitigate these risks.
- Growing Responsibilities Perpetuate Planning
Increased growth brings unforeseen scenarios, such as potential liability involving trusted individuals like officers, directors, or shareholders. A Directors & Officers (D&O) policy can protect individuals against mismanagement claims. Additionally, consider a Business Life Insurance or Perpetuation plan to manage equity transfer smoothly if a business partner passes away, allowing remaining partners to buy out shares at a pre-determined price.
For more information on customizing your insurance for growing revenue, reach out to Swarts Manning & Associates.
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