Entrepreneurs often have a list of priorities that are more pressing or interesting than taking care of their business insurance. But the day the company suffers a loss, they’re either glad they took the time to check what’s covered under their insurance policy, or regret not having done so!
With all the demands of everyday life, it’s tempting to just renew your current policy as quickly as possible. It’s also not uncommon for business insurance to renew automatically without anyone examining the renewal conditions, even though a lot of things can change in a year.
Trying to save time at the renewal stage can have very negative consequences later on. At policy renewal time, take the opportunity to review your current and future risks and coverage needs.
What types of changes can affect a company’s insurance?
Companies generally need to notify their insurer when there’s a change that may affect the validity of the policy in force or the risks it addresses. But while companies are good at doing this for major changes, such as a move, they sometimes forget about other changes in the heat of the moment. It’s important to correct these oversights as soon as possible. It’s also important to reassess your company’s needs at the time of renewal and ensure that answers provided in the past are still correct and if not, to adjust them.
Here are some examples of events that warrant an update to the company’s insurance policy:
- Investment in new machines
- Hiring new employees, especially if it includes purchasing new equipment
- Modifications to the workspace, including expansions or embellishments and renovations
- Addition of new products or services
- Reorientation of business activities
- Entering new markets outside Québec
- Automation of a service previously provided by employees (employees replace by a new device such as a computer system, vending machine, self-service checkouts, etc.)
- Opening or closing of a branch or office
- Addition or removal of a creditor
- Improving safety in the workplace, for example by adding an alarm system
All these changes can affect your company’s coverage and the premium it pays. It’s better to mention such changes to your insurer so they can determine if the policy needs to be modified, coverage needs to be added, or the premium needs to be adjusted.
Transparency Pays Off in the Long Run
Sometimes people leave out information because they don’t want their premium to increase. But leaving out information can have major consequences. If you have to make a claim and the insurer notices your company has made a false declaration or failed to report an additional risk, the insurer is authorized to reduce the compensation it pays or not pay any compensation at all.
Being transparent with insurers pays off in the long run because it’s in your company’s best interest to provide the right answers. It’s better to ask the insurer questions if you don’t fully understand what they’re asking. For example, the question “Do you make sales in the United States?” refers to all of the company’s sales, even online sales on a site that’s hosted in Canada.
Any renewal or request for a quote is also an opportunity to learn about insurance products that may be relevant to your company, and to consider taking care of all your insurance under one roof.
So instead of thinking of insurance renewal as a chore and a waste of time, think of your insurer as an ally who can help you secure your company’s assets. It’s worth setting aside a bit of time at least once a year!