The beginning of a new year is an ideal time to review your business insurance.
As your business evolves, ensuring your coverage keeps pace is essential.
Collaborating with your insurance broker or adviser can optimise your policies and avoid costly mistakes.
Here’s how to approach your insurance review effectively.
Step 1: Evaluate Your Current Coverage
Inventory Your Policies
Start by gathering all your existing insurance policies. These may include general liability, property, business interruption, workers’ compensation, and industry-specific coverages. Create a detailed list to ensure you have a comprehensive view of your protection.
Understand Policy Details
Review the coverage limits, exclusions, and premiums for each policy. This exercise will highlight areas where you may be underinsured or overpaying.
Account for Business Changes
Reflect on changes your business underwent in the past year. Have you expanded operations, introduced new products or services, hired additional staff, or purchased new equipment? Each of these developments can affect your risk profile and insurance requirements. Ensure your current policies adequately address these changes.
Step 2: Avoid Common Insurance Mistakes
Address Policy Exclusions
One common oversight is neglecting policy exclusions—specific conditions or scenarios not covered by your insurance. Thoroughly review the exclusion clauses to identify any gaps that might expose your business to unexpected risks.
Account for Inflation and Asset Values
If the value of your assets or replacement costs has risen, your existing coverage limits may no longer suffice. Adjust your property insurance to reflect current valuations and avoid underinsurance.
Evaluate Liability Exposure
Growth in your business often leads to increased liability exposure. Whether through more employees, customers, or locations, your risk of third-party claims may rise. Review your general and professional liability coverage to ensure the limits align with your business’s current scale.
Step 3: Make Necessary Adjustments
Update Coverage Limits
Based on your review, adjust your coverage limits to better protect your business. For instance, increase property insurance to cover new assets, and review your business interruption insurance to ensure it can sustain potential downtime.
Update Policy Information
Verify that all policy details—such as business address, contact information, and insured assets—are accurate. Errors in your records could lead to denied claims or inadequate coverage when you need it most.
Schedule Regular Reviews
Make insurance reviews an annual practice. Even if no major changes have occurred, a yearly review with your insurance broker or adviser can uncover issues early and ensure your coverage remains robust.
The Role of Your Insurance Broker or Adviser
Navigating the complexities of business insurance can be daunting, but your insurance broker or adviser is an invaluable resource. They can provide expert guidance tailored to your industry, helping you identify risks and recommend appropriate adjustments. By partnering with a broker or adviser, you can confidently adapt your insurance to your evolving needs.
Starting 2025 with a thorough insurance review sets your business up for a secure and successful year. Don’t wait—schedule time with your insurance broker or adviser to ensure your coverage is comprehensive, up-to-date, and aligned with your business’s goals.
If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.
This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.
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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Please consider whether the information is appropriate to your circumstance before acting on it and, where appropriate, seek professional advice.