Commercial Insurance Renewal Checklist
So it is that time of year: insurance renewal time. If you are lucky and haven't had any claims this year, you probably last thought about your insurance exactly one year ago.Insurance is that silent partner. Maybe your policy won you a few customers, because everyone likes to see that a business or contractor is insured, but it can be easy to forget that it is even there.
Now that it is time to renew, just what exactly should a responsible business owner do?
1. Review any improvements or changes you've made to your building/office. Opened a new location? Changed your security system? Purchased new equipment? We need to know. Updates to your building that improve safety and accessibility can lower your rates. Replacing specialized equipment with expensive repair costs with newer models that are cheaper to fix can lower your costs.
2. Assess changes to your products, services, or revenue. If your business has grown, don't assume that the coverage you had from the previous year will be sufficient. Changes in your business often mean changes to your insurance. You may find yourself paying for insurance you don't need or that you are actually underinsured. If you've stopped providing a service that was considered high-risk, your rates may decrease accordingly. If you are now selling your products on your website in addition to your brick-and-mortar location, you will require different coverage to keep your customers' private information safe. Providing clients with in-home consultations means you need commercial auto insurance.
3. Consider any employee changes. Have you hired new employees? Are your employees now doing more advanced work? The size of your payroll affects your rates for workers' compensation, as does the type of work being done. More employees also means more chances of mistakes or errors, which can affect your liability policies. The nature of work your employees do also matters. If you're now employing workers with more advanced training and skills, your rates could increase, as more training may mean more responsibility and therefore more risk.
4. Make sure you remain happy with your previous choices concerning limits and replacement vs. actual cash value. Based on any changes you've identified above, you may be able to lower your limits or you may want to increase them. How you're covered may also need to change. If your technology were to be destroyed and its actual cash value wouldn't allow you to purchase any sort of reasonable replacement, you may want to consider changing to replacement value. Industry trends and projections, such as increases in cyber attacks, may mean it's time to consider increasing your limit due to greater risks.
5. Double check policy exclusions. Determine what events and circumstances your policies will not cover and make sure you still feel comfortable with those exclusions. By reminding yourself what events are not covered, for example an earthquake, you will be better prepared if unfortunately you do experience such an event. Many people fail to read this portion of their policy and are surprised to find out that not everything is covered! A smart business owner knows what insurance will cover and what it definitely will not.
Take the five steps above, gather your documents, and you will be more prepared than most business owners are when it comes time to renew. Make a list of any questions you have. A good agent/broker should take the time to review your policy with you and make sure everything is working. If you're unhappy with your coverage, now is the time to speak up.