Growing from one location to two is a major step for any firearms business. A new storefront, warehouse, manufacturing facility, or office can provide additional space and help support continued growth. However, adding another location also changes the risks a business faces.
Before operations begin at the new facility, it is important to review existing insurance coverage and determine whether it still fits the company.
Each Property Has Different Risks
A policy designed around one building may need to be updated when another property enters the picture. The new location could be larger, contain more expensive equipment, or have different security features. Building construction, fire protection systems, renovations, and even the surrounding area can affect the property’s risk profile.
If the business is leasing the new space, the lease should also be reviewed for insurance requirements. Landlords may require certain coverage or liability limits as part of the agreement.
More Locations Often Mean More Inventory
Expanding usually requires additional inventory. A dealer might stock more firearms and ammunition, while a manufacturer could add raw materials, components, finished products, or specialized machinery.
Knowing what is stored at each location is important. Inventory values can change quickly, particularly as sales increase or businesses prepare for busy periods. Insurance limits that worked for a single facility may not be enough to cover property spread across multiple locations.
Consider Employees and Daily Operations
A second location may bring new employees, different job responsibilities, and increased payroll. These changes should be included when reviewing workers’ compensation and other applicable business coverage.
It is also important to consider exactly what happens at each facility. A location used primarily for storage presents different risks than one where employees manufacture products, interact with customers, or handle shipments throughout the day.
Revisit Your Liability Limits
Business growth can increase liability exposure. More customers, more products, additional employees, and increased sales can all change the amount of risk a company carries.
Opening another facility is a good opportunity to review product liability, property insurance, umbrella or excess liability coverage, and overall policy limits. The goal is to make sure insurance has kept pace with the business rather than relying on coverage selected when operations were smaller.
Protect Your Business as It Grows
Insurance planning should be part of the expansion process from the beginning. ASI Insurance has focused exclusively on the firearms and ammunition industry since 2007. If your business is preparing to open another location, our specialists can review your changing operations and help you explore coverage options designed for the industry’s unique risks. Contact Associated Services in Insurance at 816-229-4450 today or visit us online for more information!
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