As insurance agents and brokers, we recommend our customers review their insurance coverage annually. We need to take our own good advice and do the same! Use an annual insurance review checklist to help you stay on track and guide your review.
Don’t neglect this important agency maintenance step. For other helpful tips on how to thrive as an independent agent or broker, consider joining the American Agents Alliance. Our blog has lots of agency management tips and resources ready for you to try!
Read on to learn more about conducting an annual coverage review of your agency.
Annual Insurance Review Checklist for Insurance Coverage
Review your insurance coverage and policies with these factors in mind during your annual agency coverage review.
1. Coverage limits.
If your business is growing, your current coverage limits may not be enough. Review your limits on your various policies, like your Commercial General Liability, Workers’ Compensation, and E&O coverage. As your profits and assets expand so do your risks and liabilities. Make sure your insurance coverage grows with you.
2. New risks developed over the year.
You might find you have a new risk that isn’t covered by any of your coverage. One example might be if you hire employees when you haven’t had any before — your business would need Workers’ Compensation coverage and Employment Practices Liability cover for this new risk. Cyber risk coverage is important as more of your business is practiced digitally.
3. Changes to policy wording, exclusions, or conditions.
As agents, we advise our policyholders to read their policies and ask questions about the wording. You should do the same as an insurance client. Check for any new policy wording, exclusions, conditions, or definitions that may change the insuring agreement. Don’t hesitate to ask your broker for help if you are concerned about language changes or modifications to your policy.
4. Adequacy of your deductibles and self-insured retentions.
Consider whether you are still retaining the right amount of risk for your appetite. Should you raise or lower any deductibles? Do you have high self-insured retentions that no longer meet your business needs? Consider if the deductibles are still appropriate for your business — and make changes if needed.
5. Changes to your business that require new coverage.
Have you expanded or changed your business over the last 12 months? If so, your insurance coverage may also need to expand to meet your needs. If you have expanded your agency, purchased new technology, or hired more people, you might need to update your coverage.
6. Risk mitigation efforts that may affect your premiums.
Better risk management usually results in a premium reduction. If you’ve made improvements to your property, security, or staff training, it could help you lower your risks — and in turn, your insurance costs. Talk with your broker or carrier about your risk management strategies. For example, some property in California is located in high wildfire risk zones. Taking proactive steps to lower your risks can help reduce premiums.
7. Regulatory changes that affect your coverage.
Check for any changes to regulations that may affect your insurance coverage. For example, following the pandemic-related shutdowns, some carriers have rewritten their business income coverage and exclusions. Your annual insurance review checklist can help identify any changes or areas of concern.
8. Review your loss history.
Take time to review your loss history. Perform a claims review for any losses that happened during the year — what happened and how could you have reduced or prevented losses? Did you have any losses that were not covered? If so, consider if you need to purchase additional coverage.
9. Protect any new assets.
If you have purchased significant assets over the last year, you might consider scheduling them or adding new coverage. Computer equipment or new vehicles for your business could need a new policy.
Join the American Agents Alliance for More Helpful Resources
Your business grows and changes all the time, so make sure to perform an annual coverage review. For more resources to help you run your agency, become a member of the American Agents Alliance. We have discounts on agency management systems, software, and forms to keep your agency running smoothly.