The market is continuing through a hardening period, impacting pricing, coverage availability, renewals and underwriting trends. The uncertainty is influencing renewals for all industries and lines of coverage. Don’t be caught unprepared for these challenges. Review the below recommendations to ensure you are prepared for your upcoming commercial insurance renewal.
1. Start Early
The hardened market has blindsided many businesses during their recent renewal period. Your business has the best opportunity for a smooth renewal process by staying proactive. We recommend preparing for your renewal four months before your expiration date by:
- Downloading our Commercial Insurance Renewal Guide
- Compiling current documents for review, including:
- Copies of your business’ current insurance policy
- Organizational financial reports, including balance sheet and profit & loss statements
- Current payroll
- Scheduling a meeting with your risk advisor to discuss potential underwriter requests and how to favorably present your business.
- Evaluating any operational or business practice changes your organization may have experienced, such as:
- Modifications or additions in services or product lines
- New funding opportunities or business loans
- A significant increase or decrease in employees
- Current or impending lawsuits or legal filings
- Thoroughly reviewing your organization’s insurance policies to verify they provide effective protection against your organization’s unique risks. (Pro tip: Have your broker do a deep-dive analysis of your current insurance program to ensure your organization is adequately covered.)
- Performing a risk analysis to evaluate any necessary coverage adjustments or new risks your business may have taken on. Include an evaluation of exposures and current risk management techniques.
- Preparing to justify rate increases to your organization’s leadership and budget finances accordingly.
2. Work with Your Risk Advisor
Collaborate with your risk advisor before renewal. They are experts at evaluating and recommending opportunities to avoid or minimize risk and appear more favorably to underwriters. Discuss the following with your advisor:
- Whether your business met risk management goals. If not, what prevented your success?
- Alterations in your business’ vision or goals
- Any circumstance that could impact your business’ commercial insurance
- Information and documentation the underwriter will request
- How to favorably present your business
- Changes in your risk tolerance
- Loss runs and workers’ compensation rating sheets.
3. Gather Loss History
Your business’ loss history will highly impact renewal and rates. Be prepared that underwriters will not only use this information but could also require additional data or justification. We recommend that you:
- Review your business’ claims data and, if possible, close any open claims.
- Work with your broker to analyze your organization’s loss history and evaluate whether any changes could reduce future claims.
- Verify your business implemented all broker or carrier risk control recommendations.
- Utilize and implement risk management tools offered by your broker and risk manager. It could lower your risk and make you look favorably to underwriters.
- Be prepared to explain your business’ losses and plans to mitigate. Underwriters are more scrutinizing of loss history.
4. Evaluate Exposures
Exposures identify your business’ susceptibility to numerous risks through normal operations. Exposures are not stagnant. Loss trends should be reviewed annually as both external and internal factors can impact your organization’s risks. Be proactive to understand and insure your business’ greatest exposures. During a hardened market, insurance programs may need to be adjusted to maintain affordable and available coverages. To evaluate your exposures include:
- A five-year report of your business’ loss trends
- Verification your organization’s loss control and safety management programs are targeted toward loss trends and identified uncontrolled risks
- Confirmation that current risk management programs are utilized and implemented throughout the organization. Work with your risk manager to create and implement any needed programs (e.g., safety manuals, fleet safety programs, employee handbooks, hiring guidelines).
- A culture of safety evaluation for efficiency at creating and maintaining a safe work environment. Download our Safety Culture Toolkit for tips to improve or create a program.
5. Create an Effective Submission
Any commercial insurance renewal submission should represent your business favorably to underwriters. Collaborate with a broker who has expertise in your industry and excellent carrier relationships to negotiate on your behalf. Be proactive and ready to provide data to meet stricter underwriting guidelines. Make sure to include the following:
- A detailed description of your business’ operations, including changes during your previous policy period and risk controls
- All organizational financials
- Explanation of any claims and the actions taken to mitigate future losses
- Defined safety and loss prevention efforts (e.g., building improvements, installing new fire safety systems, additional lighting, building upgrades)
- Additional attributes that positively impact your business’ risk profile
- Explore cost savings to retain more risk (e.g., higher deductibles, self-insured retentions, loss sensitive plans, alternative risk transfer).
We’re Here to Help During Your Renewal Process
Your insurance broker can offer extensive knowledge and guidance to help you through your renewal process. They can present opportunities and options for coverage as well as identify the risk factors. Connect with a member of our team to help you understand the finer details of your policy and get the most favorable renewal for your organization.