Keeping Your Insurance Up To Date

Small Business Public Liability Insurance

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Often when we take out home or car insurance, we take the ‘set and forget’ attitude until renewal time.

That’s not necessarily a good thing, but most of us can get away with doing that unless anything drastic changes.

Unfortunately many business owners take the same approach with their business insurance.

This isn’t because we’re lazy – it’s because we’re spending so much of our time simply running the business!

But keeping your information up to date can be very important, as we’ll see below.

What needs to be updated?

Your business insurance is based on a wide range of factors that you may or may not remember from when you originally took out the policy.

Some of the major factors include the following:

  • Business activities
  • Revenue / turnover
  • Staff numbers
  • Use of subcontractors / labour hire
  • Location of your premises
  • Work locations
  • Equipment and machinery
  • Contents and stock

So if any of these areas change, it’s important to let your broker or insurance company know.

In some cases the change will make no difference, but it’s far better to be safe rather than sorry.

You might even find that updating your insurance will save you some money.  For example if your revenue is less than expected, updating your policy could result in a refund of part of your premium.

Even if something in your business not in the list above changes, it is worth letting your broker know just in case.

Isn’t this just a renewal thing?

Many small business owners (and insurance brokers for that matter) see renewal time as the best opportunity to review your insurance needs.

It certainly is a great time to review everything, but it’s important to know that you cannot wait until this time to update your policy and still expect to be covered.

For example if you start holding twice as much stock half way through the year and don’t update your insurance, you’re not going to be covered for the extra stock.

Or if you start undertaking additional business activities and don’t update your policy, you’re not going to be covered for anything involving those activities.

This is a serious risk, and highlights why you need to update your insurance straight away, and not just at renewal time.

What actually happens at renewal time?

Whilst we’re on the topic of renewals, let’s take a look at what actually happens at renewal time, specifically with regards to updating your details.

Your insurance broker is required to issue a renewal to you regardless of whether or not you have requested one.

Of course it’s up to you whether or not you choose to pay the renewal, but it does have to be issued unless you specifically request that you do not want to renew.

Generally your broker will try to contact you a month or two before the renewal is due to see if there are any changes needed for this year’s policy.

If contact cannot be made, the broker will generally issue your renewal based on the previous year’s information.

If you go ahead and pay the renewal, you need to be aware that it is based on old information.  If you make a claim which involved an area of your business that has changed, you could run into trouble.

Whilst the broker will try to contact you, it is ultimately your responsibility to make sure your business details and information are up to date at all time.

Consequences of not updating

The worst case scenario is that you need to make a large claim for something that you didn’t let your broker know about, and your claim is declined.

This is a terrible outcome for you and your business, and also a poor outcome for your insurance broker who certainly doesn’t want to be involved in declining a claim for a client.

It most cases it will not be good enough to simply say “I didn’t think I needed to let you know” or “I was waiting for the renewal to update my info”.

Your duty of disclosure means that you need to let your broker or insurer know about anything that affects your business risk as soon as possible.

The whole reason we pay for insurance is to make sure we’re looked after at claim time, so don’t jeopardise that by failing to maintain the right insurance coverage.

A quick phone call or email to your insurance broker is all it takes for peace of mind for you and your business.