January 1st is probably the most common renewal date for commercial insurance policies. Sure, it's a nice clean start date and works well with budgets, but it falls right at the worst possible time of year for you and your broker to talk about insurance. Halloween just ended, your sweating over where to go for Thanksgiving then you're hosting Christmas. Oh, and New Year's vacation is thrown right in there as well.
By not accurately reviewing your insurance with your broker, you could be losing out on premium savings and filling valuable gaps in coverage that could be undiscovered until after a loss. Here are some things that you should be discussing with your insurance agent/broker well before your renewal (whether it's a January 1st effective date or not).
1. Has anything changed? Did you merge or acquire another business? Was there a change in ownership? Did you alter your business operations since the last renewal? If you answered yes to any of these, your insurance broker and carriers need to know about it and underwrite accordingly. For example, if you are a toy manufacturer and decide to stop making your highest risk product, your premiums should go way down if that exposure has dropped dramatically.
2. Have you hired or laid off employees? If you payroll has changed drastically, you'll want to tell your broker that as well. Your workers' compensation rates are based on projected payroll. If they don't know the payroll will double, you may be hit with a large audit that is hard to absorb. Conversely, if your payroll goes way down, you don't want to be paying twice as much for coverage and have to wait for an audit refund...
3. Did you reinvest in business property? Maybe you replaced all the office computers, servers, phones, desks or otherwise... A big jump in business personal property without telling your broker could create gap in coverage and leave you at risk of a potentially having an uncovered or reduced paid claim.
These are just a few of the common changes that can occur between your insurance renewals that need to be addressed. If you need assistance with your renewal, please contact us for a through review of these and other changes that need to be regularly assessed with your risk management team. Remember that an insurance review is never too early... However, it's always too late if done after a loss.