Don't be a copycat
Are you thinking of purchasing a new business? Or expanding your existing one?
Some may say you are “crazy” and others may say that “now is the time.”
While there are many legal issues that you need to take care of before you purchase a business, what I want to discuss are some of key insurance issues that can arise out of expanding or purchasing an existing business.
When a business owner expands their business – whether they open up a new location or add an addition to their existing one – it is critical to discuss these changes with your insurance agent. Insurance policies have limitations and you only have insurance for what you are paying a premium for.
This is especially important when it comes to the increased inventory, improvements that you have made to the building (whether you own the building or rent it) and if you add any new employees. It is critical to let your agent know about these changes so the coverage can be added to the policy.
If you are opening a new location, it may make more sense to add a second location to your existing policy rather than starting a whole new policy. On multiple occasions I have come across this scenario and the owner simply did not know what his options were.
If you are purchasing an existing business – don’t just use a copy of the prior owner’s insurance policy. When you do that, you are “assuming” the prior owner’s coverage. We all know what can happen when we “assume.”
Instead, take the policy to your agent and discuss your business in detail along with changes you’ve made so your agent can help you determine the coverage you need.
While the existing policy may have been adequate for the prior owner, it may not be the coverage you want or need.
Your needs have changed if you:
- spruced up the location with a remodel
- purchased new equipment
- hired additional employees
So be smart and communicate those changes with your agent to ensure that the coverage you need will be there when you need it.
It doesn’t always pay to be a copycat!
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