Why and how business owners should take charge of their insurance renewals!
When you renew your insurance policy, you change the existing insurance contract. You basically enter into a brand-new agreement without going through the entire proposal and acceptance process again. Says Yolande van Niekerk, CEO of Ibiliti Underwriters, “Insurers automatically renew or review policies annually as it would be inefficient to go through the whole process of establishing a new contract when an existing policy lapses It is also easier to build the possibility of renewal into the terms and conditions of the agreement. “It is the ideal opportunity for business owners to review their policy and makes changes to coverage.” Before renewal, you will become obliged to provide new or updated information about your business risk and to pay any revised premiums timeously. All requirements about disclosure of material facts apply as they did at inception and will also become applicable before the renewal of a policy. “Your broker should contact you annually to discuss your renewal terms. Usually, your new terms will be mailed or emailed to you more than a month in advance of your renewal. If not, then take matters into your own hands and diarise your insurance renewal dates,” says Yolande. “Business owners should start preparing and contacting their brokers at least 60 days before renewal. “ Being well prepared means you use the opportunity to gather the necessary information for potential policy adjustments. Request your broker to do the following:
- Verify your needs and reassess them.
- Validate the coverage is in force and advise you accordingly.
- Verify the renewal is issued and review your payment terms.
- valuable records and documents such as your financial statements
- furniture and valuables
- telephone and computer systems
- machinery and tools
- new services, products and merchandise
- material and equipment specific to your industry
- risk address inventory
- number of employees
- An increase in South Africa’s consumer price index (CPI) places consumers at risk of gross underinsurance. It is essential to reassess the replacement value of goods insured and the total sums insured.
- increased replacement value to be adequately protected
- depreciation so you don’t pay unnecessary premiums.
- Disclose any addition or reduction in business activities such as opening a new branch and selling vehicles you no longer use.
- Disclose any renovations, improvements or extensions and consider a building assessment if the value of your property will change drastically.
- Fluctuations in income if you have taken out Business Interruption cover. If your turnover is a lot higher than last year, your sum insured might not be enough, and you may find yourself underinsured.
- Equipment like alarm systems, surveillance cameras, fleet management, tracking, access control and risk management helps protect your immovable and moveable property. Insurance companies may give you a discount on your premium if you have managed your risk effectively. Make sure your insurance company knows what you have done at every renewal to improve and mitigate your business risk.
- Identify and consider additional business covers your business currently does not have.
Article written by Yolande van Niekerk