Have you got the right insurance cover to match your business growth?

Is your business growing? A changing business climate often means your insurance also needs to change, and you run the risk of being over- or underinsured.

Here’s are some insurance considerations for businesses going through a growth spurt. 

When to review your policy

Review your policy at least annually with your broker, even if there haven’t been significant changes. But there are also some additional events that would trigger a review. These include: 

• Growth, such as when you hire more staff, open new branches/offices or market new lines of services or products – and the same would apply if you were shrinking your business 
• Moving to a new location could mean that your new site or premises has a different risk profile
• Harnessing new technology, equipment, technique or approach could bring a new set of risk considerations – even if you’re outsourcing to a contractor.

This will allow you to check that you still have the right terms and conditions for your business – because insurer offerings do wax and wane – or if not, your broker can find you better ones. 

The optimal time to review your insurance will depend on the size and nature of your business, but the earlier you start ahead of your policy renewal date, the more leverage you have. Marsh’s small business experts put the renewal sweet spot at 3-4 months ahead of the renewal date, and the minimum amount of time being about 2 months.

This may sound tedious, but with a broker to support you, it can mean significantly less work for you, than if you were managing the process yourself.

What happens in an insurance review?

A broker will guide you through the process of evaluating your risks and discussing how they could be minimised. Be prepared to discuss changes to the following:

• Staffing numbers and wages, working hours or conditions, an anything that could affect worker compensation
• Use of contractors
• Asset register for equipment and machinery, vehicles, computing, furniture etc
• Stock inventory for stock held on your premises, but also exports
• Liability and professional indemnity considerations due to increase in customers (and also type of customers), contract size etc
• Turnover and profit over the year to check for business interruption concerns
• Technology upgrades, and cybersecurity approach.

Don’t discredit any changes to your business. For example, i fewer employees worked at your business premises during the COVID shutdowns, you may have decreased your level of cover to suit. But post-COVID if your employee numbers have now increased, then your policy needs to be updated to capture and reflect this or you might not be covered.

For time-efficiency, your broker may send you a questionnaire to fill in, prior to arranging a meeting. You might also be asked to source reports or surveys, depending on the size and nature of your business. 

Document your risk profile and management processes

To make the review more seamless, consider documenting any changes to your business throughout the past 12 months as they happen. This will become a handy checklist at your meeting with your broker.

Think about any risks faced by your industry, and what these may mean for your own business. This evidence will hold you in good stead because insurers will be very particular about which risks they agree to cover. Of course, improving how you manage your business risks leads to fewer claims. And a good broker or risk advisor will be able to guide you through this process.

This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein.

LCPA 23/150