Even though the commercial insurance market generally remains competitive, restaurants, bars, hotels and other hospitality concerns in search of the best available coverage terms, pricing and conditions should still adhere to established best practices when it comes to renewing their coverages. Here are six steps that can help make your insurance program renewal process go smoothly and achieve the best results for your company.
1. Start Planning Early
Begin working with your insurance agent or broker about four months in advance of your insurance program renewal date. That should give you ample time to have all the information needed in appropriate format so you can approach your renewal with a well-conceived strategy.
2. Have All Required Documentation
You’ll need a statement of values for all your properties, financial statement, projected revenues, payroll, organizational chart, documentation of fire protection and any other safeguards for your property, as well as lists of vehicles and drivers. You’ll also need to provide a description of any changes in operations, such as whether you started a delivery or catering service, or began serving alcohol or initiated a happy hour. Be sure to provide all information in the format preferred by the underwriters.
3. Flag All Significant Changes
For instance, did you acquire other restaurants, add a bar, obtain outside investors, take on more debt or make any other significant changes to your company’s financial structure? Be prepared to discuss with the underwriters how these might affect your business, including changes in coverage requirements brought about by new investors, lenders or financing arrangements.
4. Prepare to Discuss Any Large, Insured Losses
If your establishment sustained any significant property or liability losses in the past year, be prepared to discuss them with the underwriters. Describe their current status, including whether or not they are being litigated, and the outcome if settled. And be sure to explain any steps taken to prevent a recurrence of this type of loss.
5. Compare Insurance Policies
If you’re marketing your insurance program to a number of different carriers, be sure to look beyond pricing to make sure you’re getting the same level of protection. A lower premium from one insurer might have trade-offs, such as higher deductibles, exclusions or sublimits for certain types of loss events. In addition, watch for differences in warranties, coverage territories, utility failure protection, and mandatory loss control requirements. These factors may affect the amount of financial protection the policy provides or significantly increase your cost of doing business. Furthermore, don’t overlook an insurer’s track record for claims paying, service, and solvency rating from a reputable ratings agency.
6. Look for Adequate Coverage
Many insurance agents and brokers provide benchmarking data that will give you an idea of how much liability protection, or coverage limits, peer companies are buying that operate in similar geographic areas as your business. Even though you may be required to obtain minimum levels of coverage to meet requirements of your lenders or investors, you should make sure these amounts would be sufficient to protect your business in the event of a loss.
Planning for Insurance Program Renewals
For assistance with all aspects of your property/casualty insurance renewal, including planning, program design and placement, contact Restaurant Programs of America at (866) 324-1099.
Head of National and Middle Market Accounts
RPA Insurance Services, LLC