New Year Insurance Health Check!


2016 is here!

New Year is traditionally a time for people to make resolutions and plan for their year ahead.

It’s also a great time for business owners to take stock of the year that was and do a bit of planning for the business year ahead, including the goals and the direction for the business and ensuring financial and risk management strategies still meet the needs of the business. While you’re doing this it’s a great time to review your insurances to ensure your cover still meets the needs of your business. Here are a few considerations around insurance you may want consider in line with your review.

What’s ahead for 2016?

Are you in growth mode, looking to expand, acquire businesses? Grow sales? Perhaps the business has already grown over the last year or so and you’re at that stage of where you want the business to be.

Any changes in your business mean that there may be considerations for your insurance. Firstly, do you have the right types of cover and levels of cover? For example if your business is growing and your level of exposure increases you may need to consider increasing the level of public liability insurance that you hold. Are there statutory requirements you need to meet (certain contracts may have minimum levels to meet)?

With a growing business another consideration is the increased value of general property, machinery and other contents your business may hold.  For example your stock levels may have been increasing as your business has grown, so it’s worth checking to see if you have the enough cover within your business insurance to cover any losses.

Have you added new business activities to your repertoire since you last took out your insurance? If so you may not be insured for these, it’s worth checking to ensure your cover is complete. On the flip side if you have stopped doing some lines of work, you may be over insured!

And finally it’s worth doing a quick review of your policy to understand exactly what your covered for so if you do need to make use of your policy there are no nasty surprises.  Some things to include in your review are:

Endorsements – does your policy have any endorsements? Or does it require any endorsements?  An endorsement modifies the policy to suit your circumstances and can add coverage for something that is not standard.  For example most Business Insurance policies do not include cover for flood and, depending on the insurer you are with, you could get an endorsement to include flood cover.

Re-instatements – does your policy have reinstatements? If you make a claim (or series of claims) and your Limit of Indemnity is reached, a “reinstatement” resets your Limit of Indemnity. For example if your policy has $1 million limit of indemnity and no reinstatements, and you make two claims totalling $1 million, you will need to wait until your policy anniversary for your Limit of Indemnity to be restored and to make a new claim. (You will only be able to claim for an event that happens after your Limit of Indemnity has been restored). But if your policy has 1 reinstatement it means that after your two claims, your Limit of Indemnity will be restored once more, allowing for future claims. Policies vary and may offer no reinstatements, 1 or 2 reinstatements or even unlimited reinstatements. Understanding this will help you understand the true value of your cover.

The insured name – have you changed the name of your business? The insured name is what ‘covers’ the business so make sure you’ve got the correct name for your cover.

Continuous Cover – is your policy a claims made policy and does your policy offer you continuity of cover?  Under your obligations you need to disclose any circumstances that may lay rise to a claim.  Continuous cover extends cover should a claim arise out of a circumstance you innocently failed to notify under a previous policy (note you need to be continuously insured with the same insurer to qualify for this).

Retroactive Date – the retroactive date is the date which your cover effectively commences, regardless of who you were insured with before. This is an important one as some insurance is written on a claims made basis, which means that the policy provides cover only for claims made during the policy period. Having a policy with retroactive cover means you will be covered for claims made for circumstances you were unaware of before the policy period commenced (and after the retroactive date).

This may all sound like a lot to think about but a quick check in on all of the info above can make sure your business is insurance fit for the year ahead!

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