No two businesses face exactly the same risks.

A retail store has very different insurance needs than a contractor, restaurant, manufacturer, or consultant. That’s why one of the most important steps in purchasing business insurance is understanding your company’s risk profile.

Your risk profile is simply a way of identifying the exposures your business faces and determining which ones could have the greatest financial impact if something goes wrong.

Just as importantly, your risk profile should be reviewed regularly. Businesses change over time, and your insurance should change with them.

Start with the Basics: Does Your Business Need Insurance?

For most businesses, the answer is yes.

Even if insurance isn’t legally required, one lawsuit, fire, theft, or major property loss could have serious financial consequences.

In many cases, insurance is also required by:

• Landlords
• Lenders
• Licensing agencies
• Government contracts
• Customers and vendors

If you’re investing time and money into growing your business, protecting that investment should be part of the plan.

Do You Have Employees?

Hiring employees creates new responsibilities—and new risks.

Depending on your state and the size of your business, you may be required to carry workers’ compensation insurance. You’ll also want to consider employment-related risks, workplace injuries, and liability associated with managing employees.

As your team grows, your insurance program should grow with it.

Do You Own or Lease Business Property?

Whether you own your building or lease office, retail, warehouse, or industrial space, you’ll want to understand who is responsible for what.

Commercial property insurance can help protect:

• Buildings you own
• Business furniture
• Inventory
• Equipment
• Computers
• Improvements you’ve made to leased space

If you lease your location, your landlord may also require you to carry general liability insurance and name them as an additional insured.

Do You Use Vehicles for Business?

If employees drive vehicles owned by your business, you’ll likely need commercial auto insurance.

Even if employees use their own vehicles for work—such as making deliveries, visiting clients, or transporting equipment—you may still have business-related auto exposures that should be discussed with your insurance agent.

Business use often isn’t covered the same way under a personal auto policy.

What Property and Equipment Does Your Business Depend On?

Think about the tools your business couldn’t operate without.

Examples include:

• Computers
• Manufacturing equipment
• Contractor tools
• Photography equipment
• Medical equipment
• Restaurant equipment
• Inventory

If these items were stolen, damaged, or destroyed tomorrow, could your business afford to replace them?

Business personal property insurance and equipment-related coverages can help protect many of the assets your company depends on every day.

Could Your Business Be Sued?

Almost every business has some level of liability exposure.

Ask yourself:

• Do customers visit your location?
• Do you work at client locations?
• Do you provide professional advice or services?
• Do you manufacture or sell products?
• Could someone claim your work caused them financial harm?

Answering “yes” to any of these questions may indicate the need for liability insurance such as:

• General Liability Insurance
• Professional Liability (Errors & Omissions) Insurance
• Product Liability Insurance
• Cyber Liability Insurance

The right coverage depends on the type of work your business performs.

Has Your Business Changed Recently?

One of the biggest mistakes business owners make is purchasing insurance once and never reviewing it again.

Your insurance should be updated whenever your business changes.

Consider whether you’ve recently:

• Hired new employees
• Purchased equipment
• Opened another location
• Added vehicles
• Increased inventory
• Begun offering new services
• Expanded into new states
• Signed larger contracts

Each of these changes can affect your insurance needs. Simply remembering to reach out to your agent when these changes occur can save you from a lot of headaches later on.

What Happens After You’ve Identified Your Risks?

Once you’ve identified your business’s biggest exposures, the next step is deciding how to manage them.

Some risks can be reduced through safety practices and internal procedures. Others can be transferred through insurance.

An experienced insurance agent can help you determine:

• Which risks are covered by your current policies
• Where coverage gaps may exist
• Whether higher limits are appropriate
• Which optional coverages may benefit your business
• Whether a Business Owner’s Policy (BOP) or package policy makes sense for your operation

The goal isn’t to insure every possible scenario—it’s to protect your business from the losses that could have the greatest financial impact.

Review Your Risk Profile Every Year

Businesses are constantly evolving, and your insurance should evolve with them.

Taking time once a year to review your operations, property, employees, contracts, and liability exposures can help ensure your coverage keeps pace with your business.

The better you understand your risks, the easier it becomes to build an insurance program that protects your business today and as it continues to grow.