Business Insurance Renewal Checklist

Renewal notices tend to arrive when you are busy, and it is tempting to pay and move on. A business can change a lot in twelve months, though, and a policy that suited you last year may not match how you operate now.

Working through a short checklist before you renew can help you spot gaps early, while there is still time to do something about them.

Before you open the renewal notice

Start by thinking about what has changed in the business since the policy was last set up. Small changes can affect both the cover you need and what you are required to tell the insurer.

• Have you moved, opened a new site or changed how your premises are used?
• Have you started offering new products or services?
• Has turnover, wages or the number of staff changed significantly?
• Have you bought new equipment, vehicles or stock?
• Have you signed new leases or contracts with insurance requirements?
• Has anything happened that could give rise to a claim, even if you have not made one?

Review your sums insured

Sums insured are the amounts you nominate for buildings, contents, stock and other items. They should reflect what it would actually cost to repair or replace them now, not what you paid years ago.

Why it matters

Many property policies contain an average or co-insurance clause. If you are underinsured, the insurer may reduce what it pays on a claim in proportion to the shortfall, even for a partial loss. Building and replacement costs move over time, so values that were adequate a few years ago may no longer be.

What to include

• Rebuilding or replacement cost, rather than market value
• Demolition and debris removal
• Professional fees, such as architects and engineers
• Costs of complying with current building requirements
• Seasonal stock peaks, if your stock levels change through the year

If you hold business interruption cover, review the indemnity period as well. Think about how long it might realistically take to return to normal trading after a major event, including approvals, rebuilding and winning customers back.

Check the policy itself

Insurers can change wordings, excesses and conditions at renewal. Compare the renewal schedule with your current one and look for differences.

1. Confirm the insured name and business activities are correct
2. Check every location is listed and the addresses are accurate
3. Look at the excesses and whether any have increased
4. Note any new exclusions, endorsements or conditions
5. Check limits of liability against what your contracts require
6. Confirm any interested parties, such as a lender or landlord, are noted

If something has changed and you are not sure why, ask. Changes to cover are not always obvious from the premium alone.

Meet your disclosure obligations

For business insurance, you generally have a duty of disclosure before the policy is renewed. That means telling the insurer anything you know, or that a reasonable person in your circumstances could be expected to know, is relevant to their decision. It can include your claims history, changes in operations and incidents that might give rise to a claim.

Some insurers ask specific questions at renewal, while others rely on the general duty. Either way, keeping a simple record of changes through the year makes this step easier. If you are unsure whether something is relevant, raise it with your insurer or broker before the renewal date.

Think about gaps and new risks

Renewal is a sensible time to ask whether there are risks you have not insured at all. Businesses often add cover piece by piece without stepping back to look at the whole picture.

Areas that are sometimes overlooked include cyber incidents, management liability, portable tools and equipment, goods in transit and machinery breakdown. You may decide not to insure some of these, which is a legitimate choice, but it helps to make that choice knowingly.

If you would like a second set of eyes on a renewal, a broker can compare the old and new terms and talk you through the differences. Tasman Insurance Group regularly helps businesses review their renewals in this way.

This article is general information only and does not take into account your objectives, financial situation or needs. Before making a decision about insurance, read the relevant Product Disclosure Statement and policy wording, and speak with a licensed adviser about your circumstances.