Small businesses like independent retail shops, specialty boutiques, and local service providersthroughout Montgomery and Bucks Counties are getting ready for Small Business Saturday and the overall end of year surge. This is the time of year when people and businesses spend more money than ever, and our commercial clients are preparing to handle the additional orders, foot traffic, service calls, and staffing levels.
Major changes in business, even if they are temporary, can make a difference in how your insurance coverage works. If your business, whether it’s a retail operation or service provider, sees a jump in revenue, inventory, or employment during this time of year, we encourage you to get in touch with your commercial insurance agent for a policy review. A simple conversation will cover all the bases to make sure your business is protected through the new year.
Align Commercial Property Limits with Actual Costs
Not only do many businesses carry more inventory during the fourth quarter in general, but even standard inventory value is significantly up from prior years. Whether you’re adding extra stock and equipment for the holiday season, or even if you are just maintaining business as usual, it is probably a good time for a property assessment.
Most commercial property policies are written on a Replacement Cost basis. This means that after a covered event like fire, vandalism, burst pipe, or storm damage, the policy will replace inventory, shelving, fixtures, and equipment with new items at current prices. The total payout, however, is capped by your policy’s property limits. The items needing to be replaced might be of much higher value now due to inflation over the past few years.
When you review your policy for an end of year check-up with your agent, ask them to help you assess your current or expected inventory levels and existing property against your commercial limit. If the replacement cost would far exceed your current limits, it’s time to adjust your policy.
Customer property values are most likely higher as well. If you have a business that holds customer items for repairs, customization, or other services, it would be wise to make sure your coverage can handle a claim. Even if you do not tend to take on more work this time of year, the baseline value of what you have always accepted at your shop is likely to be more than what it was when your policy was first written.
Economic Effects on Commercial Liability Claims
While additional foot traffic and winter weather are nothing new this time of year, the way people handle injuries may be changing. In a stressful economic climate, which many claim to be experiencing this year, people are more inclined to file injury lawsuits. It’s unfortunate that businesses have to deal with higher risks during a time when budgets are already tight and margins are slim, but your general liability policy may be due for an upgrade.
Prepare for fewer people to shrug off minor slip and fall accidents this holiday season by reviewing your liability limits with your commercial agent. A commercial umbrella policy is typically a smart additional layer of coverage to ensure that your hard-earned business assets are fully protected. Umbrella policies are very affordable, but they offer another $1 million or more above your existing general liability limits. This level of coverage can help you comfortably meet the holiday rush for your business.
Cover Your Seasonal Employees with Training and Workers Compensation
Seasonal employees are often needed for businesses that see a big rush during the fourth quarter. While extra hands help you meet higher demands, it’s important to understand how they affect your operations.
Your workers compensation premium is based on estimated payroll. The insurance carrier requires an audit after the end of the year, and payroll costs that far exceed your projected amounts will result in a lump-sum balance being due. If you know that you are bringing on seasonal staff this year, especially if this is your first time or you are increasing the number of temporary employees, give your commercial agent a call. Your premiums can be adjusted based on new projections, allowing you to pay a higher rate over the next few months rather than getting a surprise invoice.
Seasonal workers also add general safety risks to your operations. Because these employees hit the ground running (figuratively and literally in many cases), there is less time to complete training and establish best safety practices. As a result, part-time seasonal employees have a higher rate of workplace accidents. A workers compensation claim will affect your future rates, which will eat into those much-needed busy season profits. Provide group safety training during onboarding, and add a quick touchpoint at the beginning of each shift to cover:
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Safe lifting practices
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Keeping walkways clear of debris, inventory, and equipment
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Watching entryways for wet spots or other hazards
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Correct use of equipment
It might even be a good idea to have separate sets of responsibilities for permanent versus seasonal employees so that only your most trained staff handles potentially dangerous activities.
Plan Ahead for a Positive and Profitable Holiday Season
Whether you are ramping up for a busy holiday season, or your fourth quarter is pretty standard, an annual insurance review is key to keeping your rates and coverage in line with your actual business practices. If you have not met with your commercial agent to catch up and verify inventory values, liability limits, or hiring practices, there could be several gaps in your coverage.
To get your policies up to date, contact us for a commercial insurance review. Our Smyrl Insurance team has been guiding small business owners through successive years of operations for over 70 years. We educate, nurture, and empower our clients through insurance to match their policies to what is really happening in operations. Before the seasonal rush kicks in, give us a call to review your existing policies and plans for the new year. We support retailers and service business clients with property, liability, workers compensation, and other commercial insurance solutions in Hatfield, Lansdale, Souderton, Harleysville, and throughout Montgomery and Bucks Counties.
Social Lead-in:
Gearing up for Small Business Saturday and the holiday shopping rush? Between carrying more inventory, extra customer traffic, and seasonal hiring, your business could currently have more risks than your insurance covers. Check out our latest blog to learn why a pre-holiday insurance review can protect your business through the end of the year.
