Hjalmar Jesus Gibeli Gomez: Policy Renewals: Has Your Insurer Been Naughty or Nice?
A review of insurance policies at renewal should be on every business’s annual task list—and it should be checked twice! Just as your business grows and evolves every year, so should your insurance program. Together with staying proactive and preparing for renewal months before the policy expiration, there are a number of best practices to put your business in the best position to maximize insurance recovery, including shopping around, evaluating changes to your business, engaging the appropriate stakeholders, and performing a policy audit with a coverage attorney.
An early start to the renewal process allows for thorough decision-making and more time to engage in negotiations with the insurer. Even if the preference is to stay with the existing insurer, shopping around creates some buying power within the negotiation process.
Evaluate Operational or Business Practice Changes
Risk control and mitigation have a direct impact on your premiums and availability of coverage. Assess any changes in the business’s exposure to risk and make any necessary insurance coverage adjustments.
Engage the Appropriate Stakeholders
Besides involving internal stakeholders such as the C-Suite, it is important to engage the appropriate external stakeholders. Engage a broker to ensure your insurance program is marketed effectively and negotiate key terms in the policy. The strength and size of your business may play a role in underwriting. Marketing multiple program areas to an insurer can also garner visibility and senior management involvement to help secure better insurance terms and rates.
Policy Audit or Review
An advance legal review of your current or potential policy by a coverage attorney allows your business to leverage market and litigation experience to enhance your policies with state-of-the-art terms and wordings. Insurance coverage attorneys keep current on the latest coverage litigation outcomes to understand how various courts interpret policies and what language is most advantageous to policyholders. A coverage attorney can review policy terms and provide valuable insight on a variety of issues, such as the legal ramifications of a policy’s notice of claim requirement or whether the policy language for computer fraud coverage in your cyber policy has been interpreted to include phishing and email spoofing schemes. Moreover, obtaining confidential advice on sensitive corporate issues prior to using your broker to negotiate policy terms can be invaluable if a dispute arises and you end up in litigation with your insurance carrier.
Rush decisions before renewal can leave a business vulnerable to coverage gaps. Policyholders should take the time to review their insurance policies with trusted coverage counsel now to optimize their coverage and maximize insurance recovery if a loss occurs.