Top 10 questions at renewal

Most small businesses change and evolve over time as companies respond to competitive forces, technological advances and other factors. As a result, very few organizations remain the same from one year to the next.

As your company evolves, your insurance should as well. To ensure that your policies still meet your needs, your insurance broker should review them annually. The best time to conduct this review is a couple of months before your current policies expire to capture any changes that need to be made when your policies are renewed for the subsequent term.

Here are some questions your insurance professional should ask you before your current policies expire:

1. Are you offering new goods or services? In other words, is your company carrying out the same activities that it was doing a year ago? This new activity is not automatically covered by insurers unless declared and agreed. Changes in service offerings may require adjustments to professional liability insurance coverage, and businesses that update product lines should revisit the product liability coverage in their general liability policy.
2. Does your company retain critical client information? The information that you hold about a customer or client is a source of risk. If the security of this data were compromised, it could leave your company open to legal action. Furthermore, with customer and market data or business intelligence becoming more sophisticated and critical to company performance, any damage to it or the systems that store or manipulate it could have a major financial and operational impact.
3. Has your firm changed ownership? Has the name changed, or has it purchased or formed any new companies? It is essential to ensure that the individuals and/or companies listed on all insurance policies are still accurate, so their insurable interest is covered and protected. In the case of liability policies, a claim made against an unlisted company on your policy may be declined.
4. Has your firm acquired any additional property, including vehicles, within the last year? Businesses that bought or sold a business vehicle will need to adjust their commercial auto insurance coverage if they haven’t already done so. In addition, businesses may need to add hired and non-owned auto insurance if employees use personal vehicles for business purposes. Personal auto insurance policies typically don’t cover work-related driving.
5. Has the value of your building or personal property changed? Most businesses insure their property on a replacement cost basis. If building costs have increased in your area over the last year, you may need to increase the Building Limits on your property policy. You need to think of this risk a year ahead so factoring in the expected inflation rate should be considered when deciding whether current limits are adequate.
6. Do you expect your revenue to increase or decrease over the next year? Liability insurance policies are usually rated based on revenue. Moreover, liability policies are often subject to adjustment. If you underestimate your income for the coming year, insurers may require an adjustment premium which could be costly.
7. Have your internal systems changed over the last year? Items such as the purchase of a new computer system or if you have changed the way you manage data will create new or increased risk. If you are currently storing large amounts of data, you may be increasingly exposed to cyber liability risks. Over the past decade, the number of breaches to security and data through planned cyberattacks has increased.
8. Is your company operating in any new locations? Expansion is often part of a company’s future. All new offices should be disclosed to see if changes are required to current policies.
9. Is your business vulnerable to a business income or interruption loss? What if a disaster prevented your business from operating? How long would your company survive? Disruption in the service you provide can be catastrophic, particularly in the current business environment where the immediacy of the internet has raised expectations of 24-hour service, instant ordering and rapid delivery.
10. Have you renovated or made any significant repairs to your home? Have you had an alarm system either installed or deactivated? Did you update plumbing, electrical, water, heating, or has any utility been added or changed? All these questions should be flagged by your insurance broker, so that you have proper coverage.

You have questions. We can help you get answers.

Contact your broker today to get ahead of your renewal!