Reviewing insurance coverage at the end of the year is crucial to ensure your clients are adequately protected against potential risks at the start of the new year. Here are the areas to review with individual policyholders and businesses to support them in sufficient coverage going into 2024.
Individual Policyholder Year-End Checklist
Most policyholders will understand that reviewing their insurance policies at the end of the year is a smart move. Here’s a checklist you can use to make sure they’re protected in each risk area:
🗹 Life Insurance
- Review your client’s life insurance policy, ensuring they understand the type they have (term, whole life, universal life).
- Review their beneficiaries, coverage amounts, riders, and any additional features. Consider changes in their life circumstances that might necessitate adjustments.
- Remember to review outstanding debts, mortgages, plans for future education, and needs for income replacement.
- Compare the policy to other options now on the market.
🗹 Homeowners/Renters Insurance
- Review your client’s homeowners/renters insurance policy, ensuring they understand the coverage types, limits, deductibles, exclusions, and any endorsements or riders attached to it.
- Evaluate any changes that may alter property value, such as renovations, additions, or upgrades.
- Do an inventory check and update coverage for new valuable possessions added over the year.
- Assess deductible amounts and determine whether they’re still appropriate for the client’s financial situation.
🗹 Auto Insurance
- Review your client’s auto insurance policy documents, ensuring they understand the coverage types (liability, collision, comprehensive) and coverage limits.
- Ask about any changes in driving habits over the year, such as changes in the commute, driving more or fewer miles, or adding new drivers to the policy.
- Assess any changes in the vehicle’s condition, including modifications, upgrades, or other changes in the value.
🗹 Disability Insurance
- Review your client’s insurance policy, ensuring they understand the coverage type (short-term, long-term), benefit amount elimination period, and any limitations.
- Also make sure the client understands the policy’s definition of disability, as some have stricter definitions that could affect their ability to claim benefits.
- Ensure the client’s coverage aligns with their current employment status, income, and potential for disability.
🗹 Travel Insurance
- Review the client’s insurance policy, ensuring they understand the coverage types, including trip cancellation, trip interruption, emergency medical coverage, baggage loss or delay, and any other inclusions or exclusions.
- Ask about your client’s travel plans for the next year. Consider destinations, duration of trips, and any specific activities or excursions they plan to undertake. Ensure the policy provides adequate coverage for their itineraries. Some policies may not cover certain activities, sports, or events.
- Make sure the client understands the policy’s stance on pre-existing medical conditions and any coverage or exclusions.
🗹 Specialized/Luxury Insurance
- Reevaluate coverage for valuable items, such as jewelry, art, antiques, boats, collectibles, etc. Reassess the value of each item, as it may have changed over time.
- Suggest getting updated appraisals to ensure the coverage accurately reflects their current market value.
- Ask about newly acquired luxury items, ensuring they’ve been added to their policy.
- Check whether their insurance policy offers discounts or enhanced coverage for implementing specific security measures for luxury items.
Business/Corporate Year-End Checklist
Businesses should also make a point to look over their insurance coverage at the end of each year. Help them by conducting a comprehensive review of all insurance policies, including general liability, property, workers’ compensation, cyber insurance, etc. Make sure the leaders understand all coverage limits, exclusions, and any changes in premiums.
🗹 General Liability Insurance
- Review the client’s general liability insurance policy, ensuring they understand the coverage types, limits, exclusions, deductibles, and any additional features or endorsements.
- Ask about any significant changes in the business, such as expansion, downsizing, new locations, acquisitions, changes in products/services, or other factors that occurred in the business during the past year that might affect the business’s risk profile.
- Evaluate whether the coverage limits and scope provided by the policy are sufficient to protect the business from potential liabilities arising from bodily injury, property damage, advertising injury, or other covered risks.
- Consider industry-specific risks or liabilities that might not be adequately covered by a standard general liability policy. Some businesses might need additional specialized coverage based on their operations.
- Review any contractual requirements related to general liability insurance. Some contracts with clients, vendors, or landlords might specify minimum coverage limits or additional insured requirements.
- Ensure that any parties requiring additional insured status are included in the policy as needed, especially if there have been changes in business relationships.
🗹 Property Insurance
- Review the client’s property insurance policy, ensuring they understand the coverage types, limits, deductibles, exclusions, and any additional features or endorsements included in the policy.
- Assess any changes to the business property during the year. This might include property acquisitions, disposals, renovations, expansions, or changes in property values that might affect coverage needs.
- Evaluate whether the coverage limits provided by the policy align with the current value of the business property. Consider factors such as replacement cost, market value, and potential appreciation or depreciation of assets.
- Consider whether specific risks or perils relevant to the business location or industry might require additional coverage. For instance, coverage for natural disasters, floods, earthquakes, or other specific risks might be necessary.
- Check for any property-related claims filed during the past year. Look into the nature of these claims and consider how they might impact the renewal or terms of the policy.
🗹 Workers’ Compensation
- Review the client’s insurance policy, ensuring they understand the coverage types, limits, deductibles, exclusions, and any additional features or endorsements included in the policy.
- Assess any changes in the workforce during the year. This might include new hires, terminations, changes in job roles, or modifications in the work performed by employees.
- Ensure that employees are classified correctly based on their job roles and tasks. Misclassifications can lead to under or overpayment of premiums.
- Evaluate whether the coverage provided by the policy aligns with the business’s needs and the potential risks associated with workplace injuries or illnesses. Consider the nature of the work environment and any changes in risk factors.
- Many worker’s compensation policies are subject to premium audits. Review the audit process and ensure accurate reporting of payroll figures and classifications to avoid discrepancies.
- Assess the claims history for worker’s compensation filed during the year. Understand the nature of these claims and how they might impact premiums or policy terms.
- Review the effectiveness of safety programs implemented in the workplace. Staying compliant with safety regulations and implementing safety measures can positively impact premiums and reduce risks.
- Evaluate the effectiveness of return-to-work programs for injured employees. Effective programs can help reduce costs by facilitating early return to work.
🗹 Professional Liability Insurance (Errors & Omissions)
- Review the client’s professional liability insurance policy, ensuring they understand the coverage types, limits, deductibles, and any exclusions or specific provisions related to cyber incidents.
- Assess whether changes in products or services require adjustments in coverage.
- Evaluate whether the coverage limits provided by the policy align with the potential risks associated with professional services or consulting offered by the business.
- Check for any claims or incidents filed against the business during the year. Consider the nature of these claims and how they might impact premiums or policy terms.
- Review any contractual obligations requiring specific levels of professional liability coverage. Ensure the policy meets the minimum coverage requirements stipulated in contracts with clients, partners, or vendors.
- Evaluate the effectiveness of risk management practices within the business. Implementing strong risk mitigation strategies may reduce the likelihood of claims and impact insurance premiums.
🗹 Cyber Insurance
- Review the client’s cyber insurance policy, ensuring they understand the coverage types, limits, deductibles, and any exclusions or specific provisions related to cyber incidents.
- With the increase in cyber threats, evaluate whether the coverage limits provided by the policy are sufficient to address potential financial losses, liabilities, and expenses associated with cyber incidents, including data breaches, ransomware attacks, or system disruptions.
- Assess any changes in business operations, technology infrastructure, or data handling procedures throughout the year. Ensure that the policy aligns with these changes and covers new potential risks.
- Conduct or revisit a cyber risk assessment for the business. Identify potential vulnerabilities, threats, and areas that might need additional coverage based on the evolving cyber landscape.
- Review whether the policy mandates specific security measures or compliance requirements for coverage eligibility. Ensure that the business is meeting these criteria to maintain coverage.
🗹 Business Interruption Insurance
- Review the business interruption insurance policy, ensuring the client understands the coverage terms, triggers for coverage, exclusions, limits, waiting periods, and the calculation method for loss of income.
- Assess any changes that occurred in the business during the year. This might include expansions, relocations, changes in operations, new products/services, or other factors that might affect the business’s risk profile.
- Evaluate whether the coverage limits and duration provided by the policy are sufficient to compensate for potential income losses due to interruptions. Consider the impact on revenue, fixed expenses, and ongoing costs during a disruption.
- Review the business’s risk assessment to identify potential threats and vulnerabilities that could lead to interruptions. Ensure that the policy covers a wide range of perils that could affect business operations.
🗹 Directors and Officers (D&O) Insurance
- Review coverage for management against potential liabilities. Make sure they understand coverage types, limits, exclusions, retroactive dates, and any endorsements or extensions.
- Evaluate any significant changes within the company, such as mergers, acquisitions, restructuring, or changes in leadership. Ensure the policy reflects these changes.
- Assess any claims or potential claims that have arisen over the past year. Ensure the client understands the nature of these claims and how they might impact the policy going forward.
🗹 Commercial Vehicle Insurance
- Review your client’s commercial vehicle insurance policy documents, ensuring they understand the coverage types (liability, collision, comprehensive) and coverage limits.
- Note any changes to the commercial vehicle fleet over the past year. This might include new vehicle acquisitions, vehicle disposals, modifications, or changes in usage.
- Assess whether the coverage limits for each aspect of the policy (liability, property damage, medical payments, etc.) are sufficient based on your business’s needs and the value of the vehicles.
- Update driver information, including any changes in the drivers covered under the policy, newly hired drivers, or changes in driving records that might impact premiums.
- Evaluate any changes in how your commercial vehicles are used. For instance, if there are changes in routes, mileage, or purposes of use (such as adding delivery services), ensure the policy aligns with these changes.
General Steps for Each Area of Review
Step 1 – Review Policy Documents
- Confirm the accuracy of all personal/business information.
- Make sure your client understands all policy terms, inclusions, and exclusions. Clarify anything they don’t understand.
- Go through the policy details to check for any changes in coverage, deductibles, or premiums.
Step 2 – Assess Coverage Gaps
- Identify any areas lacking sufficient coverage.
- Consider additional coverages like umbrella insurance or endorsements that provide extra protection for specific assets or circumstances.
Step 3 – Help Them Get The Best Rate
- Consider quotes from different insurance companies to get the best rate and be more cost-effective.
- Check for discounts — Inquire about any new discounts or incentives your insurance company might offer. Your client may qualify for discounts based on changes in their circumstances.
- Consider bundling different insurance policies with the same provider to receive discounts or streamline the management of policies.
Step 4 – Assess Risks
- Identify potential risks the individual or business might face in the upcoming year and ensure that their coverage adequately addresses these risks.
Step 5 – Coaching/Consultation
- Give coaching to individuals and business owners based on the results from reviewing each area of coverage.
- Help them plan for the year ahead — Ask if they foresee any changes in the upcoming year. Help them consider how these changes might affect their insurance needs and help them plan accordingly.
Step 6 – Double-Check Regulatory Compliance
- Ensure adherence to legal requirements and regulations.
Step 7 – Keep Detailed Records of Changes
- Keep detailed records of any modifications made to your insurance policies, there’s documentation of any updates and discussions.
Final Thoughts
Regularly reviewing insurance coverage is essential to adapt to changing circumstances and ensure adequate protection. By regularly reviewing and updating insurance coverage, individuals and businesses can better protect themselves from unforeseen risks and ensure they have the right coverage in place. They may even save money in the long run, for which they will be very grateful to you as their agent. As the economic conditions, technology, and climate continue to change at a seemingly faster rate, making yearly adjustments can help mitigate potential risks and provide peace of mind.