Trust us – you don’t want to skip your annual commercial insurance renewal. Why? If your business has changed over the past year, you run the risk of potentially overpaying for coverage or leaving your business underinsured.
During the business insurance renewal process, business owners have the opportunity to work with their insurance agents to determine if their insurance policies are still providing the coverage they need at the best available price.
We understand business owners have a lot on their plates and simply renewing their existing insurance policies is a tempting and common option. That’s why we’ve prepared a comprehensive commercial insurance renewal checklist – to make starting the process as simple as possible and let you do what you do best: run your business. Let’s dive in.
What is a Commercial Insurance Policy?
A commercial insurance policy covers the business, its employees, and its owners. Commercial insurance protects businesses from losses that may occur as a result of normal business functions.
Since there are a variety of situations that businesses and owners need to protect themselves from, there are multiple different types of commercial insurance. These forms of business insurance are often split into general liability, property, executive protection, and employment protection.
What is an Insurance Renewal Process?
Insurance renewals occur at the end of the term of your policy. At this point, you can determine if you would like to renew the same policy with the same insurance carrier or if you would prefer to adjust your policy and/or carrier or negotiate terms.
Are Insurers Obligated to Offer a Renewal?
Insurers are not legally obligated to offer a renewal of the same policy. In fact, insurers may receive a letter from their insurance provider stating that the company is not renewing one of your business insurance policies. Why does this happen?
In most cases, a non-renewal notice has more to do with the insurer than with you. For example, the company may wish to stop offering that form of insurance or provide coverage for companies within your industry.
However, there are some cases in which non-renewals are specific to the business. For instance, your insurer may have concluded that you have incurred too many accidents or losses, have not maintained your property, or have failed to comply with its loss control recommendations.
It is important to note that while insurers are not required to offer a renewal, they are required to provide a 60-day notice of non-renewal.
Are Insurers Obligated to Notify Insureds of Changes in Coverage?
An insurer has an obligation under California law to call an insured’s attention to changes in their coverage. These changes may include, for example, more limitations or exclusions.
When coverage is reduced upon renewal, a process often referred to as “skinning down” the policy, the insurer must provide adequate notice of the exclusion, limitation, or reduction.
How Long Does Commercial Insurance Last?
Business owners should review their commercial insurance policies for renewal every 12 months (or, more accurately, 12 months after they take out the insurance policy). One year is the standard duration of an insurance policy for most types of insurance.
What Questions Should You Ask Before Renewing Your Business Insurance?
To properly prepare for your business insurance renewal, ask yourself the following questions:
Has Your Business Moved to a New Location?
A new location likely means changes in your general liability insurance. These changes may include, for example, moving into a different commercial space, expanding to a new location, or opening an additional office.
New locations may also mean a reduction in your insurance premiums. For instance, if the new location is smaller or includes enhanced safety features, such as a wired alarm system or sprinklers.
Has Your Number of Employees Changed?
Staff changes suggest it is time to adjust your workers’ compensation policy. Remember: under California Labor Code Section 3700, if a business employs one or more employees, the business must provide workers’ compensation coverage for each employee.
The insurance renewal process is the perfect opportunity for business owners to verify that they are carrying appropriate workers’ comp coverage for all their employees.
Find everything you need to know in our full guide to workers’ compensation insurance for small businesses.
Are You Offering Any New Goods or Services?
If your business is offering new goods or services, you may need to adjust your professional liability insurance.
Does Your Business Have Cyber Security Coverage?
Cyber insurance, also called cyber security or cyber liability insurance, covers businesses against losses resulting from data breaches. This form of insurance primarily applies to businesses that run secure networks as part of their daily operations.
While this coverage is often included in professional liability or general liability policies, the renewal process is an excellent time for business owners to verify that they have adequate cybersecurity insurance since it is sometimes purchased as a standalone policy.
Read on to learn more about cyber insurance.
Have You Purchased New Equipment?
It is essential for business owners to ensure any new equipment is covered in their commercial insurance policy. Why? The cost of your business insurance is based on several factors, including the type and amount of equipment you own.
Have You Purchased New Vehicles?
If you’ve bought or sold a business vehicle, added delivery services, or changed existing service areas, you may have to adjust your commercial auto insurance.
Where Can I Find Commercial Insurance in San Diego?
Apex was founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.
Apex brings the high-touch service proposition back to San Diego businesses and beyond.
At Apex Risk & Insurance Services, we use the Apex Proven Process to learn about your business, strategize to assemble the right program for you, and use our deep industry and market knowledge to leverage the best pricing and coverage.
This leaves small business owners with more time to do what they do best: Run their business knowing that their company and employees are protected.