Small and mid-sized business owners often assume that just because their business is smaller in size, their risks, too, are small and would not affect them severely. But this is a scary assumption, one that needs serious consideration. Not only must SMEs make insurance a priority, but they must ensure that they always renew it on time. And at the time of renewal, reassess the risks of the business and insurance.
For most people, renewal of insurance policy is like a formality that they want to get done with, with zero hassle. But pause for a minute. Think about it. Are your business risks the same as they were last year? Do you really need the same insurance each year or could a better policy be more useful to you? These are a few basic questions that one must ask before renewing insurance policies. In this blog, we discuss a few key things that insured companies must know when renewing insurance.
What is insurance policy renewal?
Insurance policies have a start and end date. The dates and duration would depend on what you choose when purchasing it. A large number of people go for year-long policies. Most insurers would remind customers of the renewal date much in advance. Apart from that, insurance broking companies and brokers, too, keep track of the renewal dates of customers’ policies.
Rethink and reassess your insurance needs
Risks can keep changing year after year. Just because you had an insurance policy for a certain amount the last year, it may not be necessary that you need to have the same amount of coverage for the next year. The chances are that you might need to increase or decrease the amount of coverage.
Why is this important?
In insurance, both overestimating and underestimating the amount of coverage required can add avoidable costs to the business. Overestimating means the company would end up paying a higher premium. Underestimating would mean the amount claimed could be insufficient. As businesses grow and change, its risks change too. Hence, it is essential to consider any new risks that the business could face.
Do not let the insurance plan expire
A recent case of a corporate building catching fire has a number of lessons to learn from. A building in a commercial locality in Mumbai caught fire, resulting in deaths and huge property damage. The insurance policy of the building had expired just a month before the fire and had not been renewed.
Choose essential add-ons to your insurance plan
You could use this opportunity to purchase essential add-ons to your insurance plan. A number of insurances provide add-on facilities. What are insurance add-ons? Additional coverage options with an added premium. For example, you could add on theft or burglary insurance to your existing property insurance.
Check for an increase in price
Often, insurance providers increase prices of insurance plans. It is important to check all the costs, hidden costs or additional costs that might have been attached to your renewed policy. However, remember, that if your insurance broker or agent is someone that you have been working with for years, the chances of them selling you costly insurance is much less. Hence, it is better to continue working with the same insurance broking company or insurer for the long term. It is important to pay the renewal amount on time, as some insurance companies do not allow any grace period.
Know more from your insurance broking company
Ask your insurance broker or insurance broking company to guide you through the process of the renewal of the insurance policy. Ask them to advise about any changes that you must consider in purchasing add-ons, other insurance policies or changes in the coverage amount. With technology and AI being increasingly used in insurance, your broker should be able to provide fast and efficient services.
Insurance may seem daunting to many, but if you have a good insurance broker or insurance broking company, the process of renewal would be a breeze. Is your business insurance up for renewal? Use the opportunity to make your insurance portfolio even stronger. PlanCover is a trusted insurance company serving all kinds of companies and specializing in SMEs insurance. Get in touch for any queries related to your business insurance.