The life of a small business owner can be very busy, filled with work to do, challenges to meet, and bills to pay. But out of sight are risks that need managing.
When it comes time to renew your commercial insurance, it might be tempting to sidestep reviewing all that’s changed since you were initially approved, but bypassing this step could leave you without the coverage you need, overpaying for coverage you no longer want, or worse, at risk of a nonrenewal of your policy. Instead, why not consider renewal time an opportunity to foster the relationship between you and your insurer, manage new risks, and identify potential savings?
How does the commercial insurance renewal process work?
Commercial insurance isn’t always a set-it-and-forget-it sort of thing. It’s a two-way relationship, and you and your insurer both have important roles to play in getting your coverage right. It’s essential that your commercial insurance reflect the value and particulars of your business operations, so before you renew – and anytime your business undergoes significant changes – you may need to inform your insurer about things like changes to your company earnings, the number of people you employ, and changes to the services or products you provide.
For example, if your business has doubled its quarterly revenue by launching a new e-commerce service and added new employees to help keep up with demand, your commercial liability, property, and cyber insurance may need to be updated.
Once you’ve communicated updated details regarding your business, your insurer will review them, recommend additions or subtractions to your overall plan, calculate your new premium, and call or meet with you for a final review of your coverage types, limits, deductibles, etc.
One thing to consider is that even if your business stays almost exactly the same, your premiums may still increase due to inflation.
Once all details are confirmed, your insurer may create a new policy for your company and ask you to read it one more time before signing the contract. In addition to receiving a copy of your newly signed commercial insurance contract, you might also want to request a Certificate of Insurance (COI). A COI is a one-page document that proves you’re insured for clients, third-party vendors, or financial institutions that require it.
Commercial insurance renewal checklist
Putting together all the info on what’s changed for your business over the past year requires time and an organized approach. Start gathering your information two to three months before your renewal date so you don’t leave out important details in a last-minute rush to finish the job.
Having more unknowns around your company’s liability, property, HR, and revenue risks, may increase renewal pricing and lower your coverage limits.
If you answer “yes” to any of the questions below it’s important to let your insurer know in a timely manner so you don’t experience any gaps in your coverage:
- Have you changed your personal or payment information? If your phone number, email, or mailing address has changed, you might not receive your renewal notice. Check your policy against your current contact details and update your insurer about any changes as soon as possible. The same applies to your payment method. If you use a credit card to pay for your commercial insurance policy, check that the expiry date and CVV code are still correct, so you don’t end up with lapsed or cancelled coverage for non-payment.
- Have you changed your business location? Have you moved your business from your home to a shared office in a coworking space, a rented office in a commercial tower, or maybe even bought a building of your own? Have you branched out with new offices across the city, in a new province, or in another country? Or did you stay where you are and renovate for the increased space you need? No matter which scenario you opted for, your commercial general liability, property, and even vehicle policies may all need updating.
- Has the number of people you employ or how they work changed? If you’ve added new employees, you may need additional coverage. If employee numbers have decreased, there may be potential cost savings.
Just as important is whether your employees work in-office, remotely, or in a hybrid work arrangement. Cyber risks can be heightened when staff work remotely and use their own computers and Wi-Fi routers. Individuals may not follow company cybersecurity practices without supervision, and data breaches may be more challenging to uncover. Demonstrating to your insurer that you have systems in place to manage the additional risk associated with remote and hybrid work and protect client and customer data can be critical to renewing your cyber insurance policy and maintaining your coverage.
- Have you changed the type of services or products that you offer? This could require changes to your professional liability, errors and omissions (E&O), or product liability coverage.
- Have you purchased new equipment or tools? Commercial property insurance costs can factor in the type and amount of equipment your business owns. Keeping a detailed inventory of the assets you buy, sell, or dispose of can be important in maintaining commercial property coverage should you need to replace lost, stolen, or damaged equipment.
- Have you added company-owned vehicles or expanded your sales team? Additional company-owned vehicles may require commercial vehicle insurance. But if you’ve added to your sales team, you might have more employees using their own vehicles to travel to and from meetings with clients and customers. Many commercial insurance policies may include non-owned vehicle insurance coverage, but when they don’t, a separate policy might be needed.
- Have you added e-commerce capabilities or more digital services to your business repertoire?
E-commerce and digital delivery of services can heighten your cyber risk. Your insurer requires a complete understanding of any new cyber risks to calculate their effect on your policy renewal and pricing.
- Has your annual revenue increased or decreased? One important factor in calculating commercial insurance can be business revenue. That’s because the more business you do, the more real-world and digital interactions you generally have and the greater your risk can become. Think of it this way: more things could go wrong if you manage a hundred clients versus ten. If your sales and income are up, your existing business interruption insurance coverage may be insufficient.
Reasons for nonrenewal of commercial insurance
There are several reasons your insurance might not be renewed, including:
- Non-payment of previous premiums, late payments, or missed payments
- A history of filing multiple claims, indicating insufficient risk management
- The insurer is no longer comfortable with the amount of risk your business generates
- The insurer is leaving your area or industry, or no longer offers the product you need
Your business deserves ongoing protection year-in, year-out.
Call us today at 1.844.429.9480 or access our secure quote tool for a quick estimate of your policy needs and costs.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.