Reviewing the insurance coverage for your business every year isn’t just a formality—it’s a smart strategy. An annual policy review can help cut unnecessary expenses and ensure coverage evolves alongside your business. Without regular checkups, companies risk gaps in protection, potentially leaving new ventures, equipment, or locations inadequately insured—or not insured at all. Working with a trusted insurance advisor makes this review even more effective.
Here’s what you need to know about annual policy assessments, including key elements to evaluate and practical guidance for a smooth review process.
Underinsurance: A Common and Costly Risk
According to research from Hiscox, a staggering 75% of small businesses are underinsured. Taking time once a year to evaluate insurance needs can help business owners pinpoint shortfalls and address them with appropriate policies.
Key Reasons to Schedule a Yearly Insurance Review
Here are some compelling reasons to make an annual insurance review part of your business routine:
- Stay aligned with operational changes and regulations. Businesses don’t stand still—they grow, evolve, and adapt. Whether it’s acquiring new assets, offering new services, or expanding to new locations, these developments can affect coverage needs. Legal and regulatory changes also occur, particularly in areas like workers compensation, professional liability, and commercial auto insurance. An annual review ensures your coverage meets current demands and compliance standards.
- Avoid overpaying and eliminate outdated policies. A careful look at existing policies can help you avoid paying for coverage you no longer need and uncover gaps you didn’t realize existed. It also reinforces your understanding of what each policy covers, helping you make the right decisions for your business.
- Build confidence and reduce uncertainty. Knowing your business is well protected gives peace of mind to owners, employees, clients, and stakeholders. With the right coverage in place, you’ll be better equipped to tackle unforeseen challenges or emerging risks.
What to Evaluate During Your Annual Review
Every business is unique, but the following areas are commonly reviewed during an annual insurance checkup:
- Changes in property, inventory, or equipment values
- Increases or decreases in annual revenue
- Liability coverage and business interruption insurance limits
- Any policy exclusions that could leave you exposed
- Number of employees and total payroll
- Commercial vehicle usage and drivers
- Cybersecurity coverage and data breach protection
- New leases, partnerships, or structural changes to the business
- Updated regulatory or legal requirements
Best Practices for Reviewing Your Policies
To make the most of your insurance checkup, follow these steps:
- Understand what your current policies include. Begin by reviewing your existing coverage so you’re aware of what’s protected and what’s not.
- Collaborate with a knowledgeable insurance representative. An insurance agent or broker can evaluate your needs, ensure compliance, and tailor coverage to your current operations.
- Document changes throughout the year. Keep records of any notable updates in your business, like new hires, relocations, or equipment purchases, as they may impact your insurance needs.
- Review your claims history. Look for recurring issues or losses that could signal the need for different or additional coverage—and take steps to reduce future risks.
- Ask about updated offerings or potential discounts. The insurance landscape changes, and new products or cost-saving opportunities might now be available.
An annual insurance review can help you avoid costly mistakes, stay compliant, and feel confident your coverage is keeping up with the growth of your business. It’s a proactive way to protect everything you’ve worked so hard to build. Reach out today to learn how we can help you tailor your coverage to fit your evolving needs.
