5 Essential Steps for SMEs when Renewing Business Insurance

Business insurance renewal time is far from a tick box exercise, it's an ideal opportunity for small to medium businesses to re-evaluate their risks and the insurance cover they need. Working with your insurance broker also helps ensure you understand all the options and are advised of the most effective insurance solutions.

Here is a guide comprising 5 essential steps for SMEs seeking optimal business insurance renewals.

1. Prepare early — make time in advance of business insurance renewals

The first essential is to not leave your business insurance renewal to the last minute. Be aware of your insurance renewal due date and prepare to start at least 6 weeks in advance of your insurance renewal — allowing time to reconsider what's needed for the business now.

This may involve considering changes to your business insurance cover, time to consult with your broker and explore options with insurers, and to identify additional cover your business may require.

2. Reassess your business insurance needs

Businesses aren't static and it's likely you will have made some changes to your operations, staffing, plant and equipment, stock in hand or business location. There may be new exposures to consider protecting and some areas where insurance cover may no longer be needed. As a starting point it can be helpful to think about how your business is different now from a year ago and risks that have grown such as cyber threats, supplier risks and employee or staffing situations.

Consider any changes you may have made to your business model, such as introducing home deliveries or using contractors for some functions, and whether the associated risks are covered by your current insurance, or if you may need additional policies?

Also think about unplanned risk scenarios that may impact your business to identify where you may need new risk mitigation and/or insurance cover.

This can help determine if you have the appropriate insurance cover for your business activities, assets and risks, or if you need to protect against additional exposures — such as cyber threats.

3. Is your existing cover adequate or does it need expanding?

Look at your existing insurance policies and the protections they provide, in consultation with your broker, and consider if these covers are still appropriate, if they are adequate or whether they need to be expanded.

A key risk Gallagher is supporting clients with is business property and asset values being underinsured. As asset values and replacement costs have been increasing annually, many businesses' insurance levels are not keeping pace so this gap is a key area to review.

Checking your sums insured is essential to obtaining a positive result if you need to make a claim. With commercial property cover, you'll need to update the replacement cost in line with current market values and the cost of meeting building regulations.

Similarly for plant and equipment, including office fittings, quote up to date replacement costs rather than relying on receipts for the original purchase price.

Don't overlook taking governmental or industry risk and regulatory requirements into account: these may have changed from the previous year, and making sure your business has the mandatory insurances in place is critical.

4. Update your business information and risk management practices

Ensure the business information you present to insurers accurately reflects your business activities, risks and countermeasures today, with the support and guidance of your broker. It's important to be completely honest when it comes to providing information about your business to insurers. That's because an inaccuracy or omission could come back to bite you when you need to make a claim.

Providing documentation to support your risk management protocols in practice may help improve your profile with insurers. So be prepared to go into detail and to make sure your statements are 100% accurate — double check if in doubt.

5. Explore the most effective overall insurance solution/s for your business

All businesses require very different types and levels of protection and there is no one size fits all. Taking stock of the overall insurance needs of your business, not just renewing or buying one policy at a time because it's due, a trap many smaller businesses fall into.

Insurance renewal time enables business owners to recalibrate: you may choose to add new policies and discard others to keep pace with changes in your business, or to restructure your cover in response to greater or reduced choice provided by insurers. There are package business insurances that provide multiple covers in one policy that can more efficiently support your business. Your broker may also suggest an alternative approach and strategy for managing business risks, such as making proactive changes to operations and managing exposures.

There are many options and considerations offered by the insurance market and your broker can best advise which will suit your needs, based on understanding and supporting your overall business requirements, how to achieve the most effective insurance solutions.

How insurance broker expertise benefits business insurance renewal outcomes

There are a number of distinct advantages to involving your insurance broker in assessing your insurance needs and finding the right cover to meet them.

• Their professional knowledge of and familiarity with insurance products and terms mean that they can readily review policies and wordings and extract the information that's relevant to your needs. Leveraging their insurance expertise provides confidence for businesses, and helps simplify the complexity for clients.
• A broker who's familiar with your business and industry also has a clear understanding of the protection you need and the types of cover you require — and what you don't.
• Being part of the insurance industry provides brokers with access to insurers and markets (local and international) that you probably wouldn't find on your own, giving you a greater scope of choice.
• The Gallagher approach to protecting your business includes access to tailored insurance products, which are typically more suitable to your needs compared to direct market products.
• Similarly this insurance market knowledge has the potential to unlock greater value for money/cost savings in the insurance cover that you obtain, in the form of broader coverage or even reduced costs of premiums and through optional add ons and customisations.

How Gallagher can help

Working with a broker to understand your business can help you to identify the right insurances to mitigate your risks. We have Gallagher brokers nationally supporting over 125,000 small to large businesses, in all industries, to provide professional expertise.

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