Renewing your business insurance? Help avoid this costly mistake
Business insurance is just one of the many tasks businesses need to revisit every year to keep their business thriving. And along with other obligations such as taxes, financial reports, audits and inventories, employee reviews, tech upgrades, and much more, the work can certainly stack up. While most business decision-makers understand the importance of prioritising their insurance review, the reality is that few are able to prioritise it over other considerations, especially given the complex nature of insurance policies and language1.
For this reason insurance policy renewals are often relegated to this last-minute, with many businesses waiting until they receive the policy expirations reminder from their insurer before taking action. This can be one of the most costly mistakes a business can make.
How renewals work – what brokers may need their clients to know
Businesses will typically renew their insurance policies annually, leading up to the anniversary date of when the policy was purchased.
Most insurers will notify policy holders of their policy expiring roughly two weeks ahead of the anniversary or renewal date. However, two weeks is insufficient time to conduct an adequate business risk review and source competitive insurance quotes.
In fact, it can be risky business.
By leaving insufficient time to consider and negotiate your options, you could risk missing out on:
- Cost savings – paying for options you no longer need
- Securing adequate coverage and renewal terms – as your business grows, and your coverage options, terms and conditions also change, you need to update your insurance to ensure that you’re also not underinsured.
When you don’t have the capacity to give your business insurance the attention it needs, then it makes sense to consider consulting with a broker. However, in order to get the most value from your broker, it’s important to kick-off a business risk review well in advance of your policy’s renewal date.
The renewal sweet spot
How much time should businesses allow for the renewal process?
- 3-4 months is the sweet spot depending on the size of your business – this provides your broker with adequate time to assess your needs, prepare the required evidence and documentation, and negotiate with insurers on your behalf; larger organisations with more complex insurance programs, could start earlier at 6 months ahead of the renewal date.
- 2 months – this is the absolute minimum time required to conduct the end-to-end renewal process for a small-to-medium business.
- 2 weeks – this leaves insufficient time for most businesses; by this stage you should be presented with your offers and contracts.
When it makes sense to consider working with a specialist business broker
Although a key factor is cost savings, working with a broker to manage your business insurance makes sense for other reasons.
Have you ever had a bad claims experience? If so, you might appreciate the support of a broker who can advocate for you and get the best outcomes when an incident occurs. In a 2023 survey, Vero revealed that clients were significantly more satisfied with their claims experience when working with a broker, when compared to working directly with the insurer2.
For a niche or specialty business, working with a broker who understands the intricacies of your operations and industry can also have advantages. While some brokers are generalists, others are experts in specific industries or sectors such as retail, hospitality, healthcare, motor trade, construction, logistics and warehousing, and trades, amongst other areas – with some having direct experience working in these industries. Specialised business brokers bring an understanding of the environment in which your business is operating, challenges and needs, and they can add value by sharing relevant claims and risk insights and data that you would not normally have access to.
Most businesses understand the importance of insurance – but the complex and intricate nature of insurance and businesses make renewal tasks cumbersome for decision-makers. By starting the renewal process 3-4 months ahead of the renewal date, and forming a relationship with a specialist business broker who understands your unique risks and can help you make informed decisions, you can save time and money on your insurance, and importantly, have peace of mind that you’re doing everything possible to help protect and sustain your business.
Marsh brokers can help you manage all of your business risk
Our services include:
- Assistance with the end-to-end renewal process
- Assessing coverage terms and conditions, and limits
- Assessing and explaining risk
- Clarifying policy wording and coverage
- Explaining legislation
- Providing insights and data into industry and claims
- Processing claims and advocating for clients
- Securing the services of other specialists as required (eg for valuations)
- Obtaining or tendering for quotes
- Providing access to risk programs for your business
- Providing access to alternative risk strategies.
Provide us with some basic details about your business and we’ll match you up with the right broker for an informal and obligation-free chat or quote.