Growth doesn't stop at the tax return: Aligning expansion with your insurance strategy

RCS Influencers Ashley and Seth Pietsch say tax planning and insurance planning shouldn't happen in completely separate conversations.

For roofing contractors, growth often means investing in the business. New vehicles, equipment, technology, facilities and employees can help a company take on larger projects, improve efficiency and position itself for the future. Recent changes to federal tax policy may also make certain business investments more attractive from a tax-planning perspective.

While your accountant or tax advisor should guide you on which credits, deductions and expensing strategies apply to your business, there is another important question to ask when making those investments: Has your insurance coverage kept pace with your growth?

Consider a roofing contractor who takes advantage of available tax rules to purchase several new work trucks and a piece of specialized equipment. From a tax perspective, that investment may provide an opportunity to accelerate deductions. From an insurance perspective, however, those purchases create new exposures that need to be addressed.

New vehicles may require changes to your commercial auto schedule and could affect your liability exposure. Additional equipment may need to be specifically scheduled or may have coverage limitations under your existing policy. Hiring additional employees can increase workers' compensation payroll and potentially affect your experience modification rating over time. Even moving into a larger facility or adding a new location can create changes to your property, liability and business income exposures.

This is why tax planning and insurance planning shouldn't happen in completely separate conversations.

Before making a significant investment, talk with your tax professional about the potential tax treatment and with your insurance professional about the potential insurance implications. Understanding both sides can help you make a more informed decision about the true cost of expansion.

It's also worth reviewing your insurance program regularly as your business grows. Revenue, payroll, vehicle counts, equipment values, locations, operations and project sizes can all change — and your insurance should reflect those changes.

Growth is a good thing. Just make sure your insurance strategy grows with it.

At Integrity Insurance & Bonding, we work with roofing contractors to help identify insurance considerations as their businesses evolve. We can coordinate with your other professional advisors to help ensure that your insurance program keeps pace with the investments you're making in your company.