When it comes time to renew your insurance policy for your business, don’t assume your current coverage is sufficient.

Here’s 5 key tips and traps when reviewing and renewing your business insurance to help ensure you and your business are properly protected.

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1. Revisit your current policy

For most directors and business owners, it’s probably been 12 months since you last looked at your policy so it’s worthwhile reviewing it.

Take particular focus on the coverage details, sums insured, terms and the amount you’re paying in premiums.

Start thinking about any changes you may need to the policy, and take note of its expiration date and if you need any additional insurance policies since your last review, such as cyber liability insurance, for example.

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2. Ask yourself, ‘how has the business changed?’

The best way to gauge if you need to update your policy is to review your business and its operations.

Consider how the business has changed since you last updated your policy, and ask these common questions to identify any changes:

• Has your service offering or product range changed?
• Has your turnover changed?
• Has your workforce changed?
• Have you moved premises, or has your footprint grown or shrunk?
• Have you made significant purchases for the business?

Any material changes to these areas of your business will likely impact your insurance policy.

Therefore, reviewing how your operations have changed over the past year will help you identify gaps where your policy needs to be updated.

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3. Switching insurers can be detrimental

The number one reason why businesses want to change insurers is to get a better price - but price alone shouldn’t drive your decision.

When comparing insurers, it’s important the providers offer the types of coverage you need, and then compare these on a like-for-like basis.

Policies can differ materially, with flood cover being a good example. Your existing provider may include flood cover up to the policy limit, whereas other providers may only provide a small sublimit or exclude flood claims altogether. For corporate policies, there can be different flood definitions to consider. Is water damage to your property caused by a blocked stormwater drain in your street considered flood? The answer might differ from one insurer to another.

Switching insurers regularly can also impact relationships with your provider.

The ability to form an ongoing relationship with your insurer is beneficial as it helps them gain better insights into your operations, which can lead to more adequate coverage and better outcomes in times of claims.

Finally, you should also consider how changing insurers impacts your coverage for past and future claims.

For example, ‘claims made’ insurance policies mean the policy in place at the time of a claim must respond, not the policy from when the advice or service was provided.

This can be problematic when dealing with claims related to historical advice or matters.

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4. Finalising the detail and structure

When finalising your insurance policy, there are a few key areas to focus on to ensure it’s structured correctly.

Firstly, review your excess. With cost commonly front of mind for many businesses, you can look to increase the excess in order to reduce your premium.

This can be a sensible strategy but it’s important to be in a position to cover the excess should the need arise. This includes when multiple claims can occur in the same policy period.

Secondly, keep your business and personal information updated. This includes your address and contact information as this will prevent issues with claims.

Third, complete your renewal before your policy expires to avoid a lapse in your coverage. It’s possible to obtain short extensions in your policy, but ideally this isn’t required.

Finally, document any exclusions which will be included in your policy wording, but may also be added by endorsement to your individual policy schedule. Some business owners may have certain exclusions in their policy so document these for visibility - this will also serve as a reminder for your next renewal.

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5. Giving yourself enough time

It’s common for business owners to leave their insurance renewals until the last minute, and renew their policies without much thought as to what changes are needed to their coverage.

You should start planning your renewals about 2 months in advance of their expiry, as this should give you sufficient time to review your policy and understand any additional requirements of the business, as well as obtaining quotes and placing your policy. It also allows sufficient time to consider other options if the renewal process does not run smoothly, for example, when your insurer seeks an unreasonable premium increase.

Of course, a good insurance broker should be leading your renewal process, and start working on your renewal 6-8 weeks before your current policy expires. This will ensure adequate time for planning, including working with your business to understand any changes before updating the policy.

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