Business insurance renewals range from simple to complex. Sometimes, in addition to the insurance renewal process, there is also an insurance audit and/or an insurance inspection.
Commercial Insurance Renewal Types
The commercial insurance renewal process varies depending on the insurance carrier, the industry, and the size of the company insured. Since company size and operations can change, many insurance carriers will require updated applications and signatures at renewal, in addition to payment. Occasionally loss runs are required, to pick up any claims that many have been filed recently on prior policies. These are all often collected by the insurance agency, which can take time, so the renewal process is started well before the renewal date.
By contrast, some insurance companies offer “direct” business insurance renewals. With a direct insurance renewal, the insurer will send a renewal notice and an invoice directly to the customer. These are preferred since typically only payment is required to renew. Sometimes underwriting will request information, but nevertheless, direct renewals are almost always easier. Insurers will offer direct renewals when they are confident that changes in company size/operations are unlikely, or when they can rely on the agent or customer to notify them of changes. Farmers Insurance offers direct commercial insurance renewals – contact our team if you are interested in learning more.
Business Insurance Inspections
Business insurance inspections can be performed at any time during the policy term. The purpose of an insurance inspection is to verify the accuracy of the information provided and to offer recommendations on how to lower risk. Sometimes inspections are performed over the phone, and sometimes they are on-site. An incomplete or failed inspection can cause a policy to be canceled, especially if any recommendations are not addressed.
Commercial Insurance Audits
Insurance premiums are based in part on factors such as revenue. More revenue equals more risk, and more risk equals more premium. During the new business and renewal process, the customer will project (estimate) revenue for the upcoming year. After renewal, they may be audited for the prior policy term. Audits are typically performed over the phone, or by using a form.
If it is discovered that the customer actually earned more than projected, they must pay an additional premium. Unfortunately, insurance companies typically do not refund premiums if the customer earns less than projected, so it is important not to overestimate. However, the projection should be realistic, otherwise a claim could be denied for misrepresentation. Whether an audit is performed depends on the industry and the size of the company insured.
Contact Chris Elliott Insurance Agency!
Our agency can often offer the preferred direct business insurance renewals, and if we cannot we try to make the renewal process as easy as possible. This includes assisting with application completion, starting the process early, and following up as necessary. If we believe additional coverage is necessary, we will perform a review and make recommendations. All this while doing our very best to offer reasonable premiums.
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