No matter when your annual insurance policies begin or end, the new calendar year is always a good time for an insurance checkup. Pull out your policies, get your broker on speed dial, and consider these questions:
Did You Hire Any New Employees?
New employees can affect your insurance policies in many different ways:
Workers compensation payroll may be increased, resulting in an increase in premium at audit.
Auto insurance: while most new employees don’t affect your insurance premium, a new driver with a questionable or bad driving record could increase your premium or put your coverage in jeopardy. All new employees should be added as drivers to your policy upon hire, even if you don’t think they will be driving.
General Liability: more employees means more work completed, which could result in more revenue. This could increase your premium at audit.
Did You Move?
If your office moved, did you inform your broker or insurance company? A larger or smaller premises may affect your liability insurance premium. The materials and construction of your office structure have an effect on your insurance premium, so it is important to inform your broker if you have moved.
Real property coverage is not transferable so if the wrong location address is on your property insurance policy you may be paying for coverage on a building and business personal property that will not be valid in the event of a claim.
Flood insurance is also not transferable, so you will need to cancel your old policy and purchase new coverage on the current location. Other types of nontransferrable coverage include boiler and machinery and earthquake.
Did You Add a New Location?
Many policies offer a small window of coverage for newly acquired locations, usually 90 days or less. Once that time has elapsed, these locations should be scheduled on your policies in order to have coverage in force. It should be noted that the automatic coverage may not be sufficient insurance for the new location.
Adding a new location in a different state or country will complicate matters, so talk to your broker if you have any new locations to report.
Did You Purchase A New Vehicle?
A few, but not all, carriers include 30 days of coverage for a newly purchased vehicle, but then the vehicle must be scheduled on the policy or coverage is voided. Check your policy documents to be sure that all vehicles are scheduled on your policy.
Now is also a good time to check the glove compartment of each vehicle and make sure you can find the auto ID card. Your broker can provide you with new copies if needed.
How Are Your Finances?
While you are closing out your year-end books, now is a good time to review your financials. The following policies are usually based on financial information:
- General Liability: Your policy may be based on sales, gross receipts, payroll or cost of work. Often these amounts are future estimates.
- Workers Compensation: Since this policy is based on estimated payroll, it is typically audited at policy year end.
Adjusting these figures midterm based on current data can result in more accurate premium during the year and less likelihood of a large additional or return premium on an audit. Talk to your broker if your sales, payroll or costs look like they will be different from what is on your policy.