What Changed Since Last Year? A CFO’s Commercial Insurance Renewal Checklist
Your commercial insurance renewal arrives, along with a request to update last year’s applications.
Revenue gets revised. Payroll gets updated. New vehicles are added. The applications are signed and returned.
For a smaller business with relatively simple operations, that may be enough. For a growing company with multiple locations, employees, vehicles, contracts and several insurance policies, it may leave important questions unanswered.
The most important question at renewal is not simply:
How much did our premium change?
It is:
What changed in our business, and did our insurance program keep up?
If you are the CFO, Controller, COO or business owner responsible for your company’s insurance, the renewal is an opportunity to review more than pricing. It is a chance to identify coverage gaps, update outdated limits and determine whether your policies still reflect the business you are operating today.
This commercial insurance renewal checklist can help you prepare for a more effective review.
When Should You Start a Commercial Insurance Renewal?
An established business should generally begin reviewing its insurance program approximately 90 to 120 days before the renewal date.
Waiting until the final few weeks can limit your options. Underwriters need time to understand the business, evaluate its claims and review updated financial and operational information. If you want to approach alternative insurance companies, the process may take even longer.
Starting early gives your company time to:
Identify changes in operations
Gather financial and underwriting information
Request and review loss runs
Update property and business-income values
Address open claims or loss-control recommendations
Review contractual insurance requirements
Evaluate alternative insurance companies when appropriate
Compare proposals without an immediate deadline
Not every insurance program needs to be remarketed each year. However, every program should receive a thoughtful review.
Short on time? Download OIA’s one-page Commercial Insurance Renewal Checklist for CFOs to organize the information and questions your company should review before renewal.
1. Identify What Changed in the Business
Insurance policies are based on specific information about your company’s operations, locations, property, employees and revenue.
If the company changes but its insurance does not, the policies may no longer reflect its actual exposures.
Before updating the renewal applications, determine whether your business has:
Added, moved, or closed a location
Formed, acquired, sold or dissolved a business entity
Expanded into another state
Introduced a new product or service
Increased revenue, payroll or employee count
Hired remote employees in new states
Purchased buildings, equipment or vehicles
Increased inventory levels
Started importing or exporting products
Begun using subcontractors
Signed larger or more complicated contracts
Changed how products are manufactured or distributed
Increased its reliance on technology
Added executives, board members or outside investors
Some changes may affect only one policy. Others can affect the company’s entire commercial insurance program.
For example, opening a new warehouse may affect commercial property, general liability, workers’ compensation, commercial auto, and business-income coverage. A new lease, loan, or customer contract could also create additional insurance requirements.
The goal is not simply to provide the insurance company with updated numbers. Your broker needs to understand how the business has changed and where it may be going next.
2. Gather the Information Needed for Renewal
Incomplete or inconsistent information can delay the renewal and make it more difficult for underwriters to evaluate your company.
The exact requirements will depend on your industry and coverage, but your company should be prepared to gather:
Updated annual revenue
Payroll by job classification and state
Current employee count
Location schedules
Building, equipment and inventory values
Vehicle and driver schedules
Customer and vendor contracts
Financial statements, when requested
Information about new products or services
Subcontractor costs and certificates of insurance
Cybersecurity controls
Open and closed claim information
Updated ownership and management information
Inspection and loss-control recommendations
The information should also be consistent across applications. Different revenue, payroll, location or operational information can create underwriting questions and slow down the process.
Your insurance broker should help you understand what information is needed and why—not simply forward a stack of applications for completion.
3. Request and Review Your Loss Runs
Loss runs provide a history of the claims reported under your company’s insurance policies. They are often required when coverage is marketed to another insurance company.
Depending on the coverage, an underwriter may request three to five years of currently valued loss runs. Request these early, especially if your current carrier takes time to release them.
Loss runs are not only for the underwriter. Your company should review them too.
Look for:
Claims that are still listed as open
Incorrect claim descriptions
Reserves that appear unusually high
Claims that may have closed but remain listed as open
Several losses arising from a similar cause
Loss-control measures implemented after a claim
An open claim does not automatically mean something is wrong. However, an inaccurate status or unexplained reserve can affect how an underwriter views the account.
If the company experienced a significant claim, be prepared to explain what happened and what was done to reduce the likelihood of it happening again.
4. Review Property Values and Coinsurance
Commercial property coverage should generally reflect the cost to repair or replace covered property—not what it originally cost or what the property might sell for today.
Construction costs, labor expenses, and equipment prices change over time. If the company has not updated its values, it could be underinsured.
Review the values assigned to:
Buildings
Tenant improvements and betterments
Machinery and equipment
Furniture and office contents
Inventory
Property at temporary locations
Property in transit
Equipment taken off-site
Newly acquired property
You should also review deductibles and any special limitations that may apply to wind, flood, water damage or other causes of loss.
Many commercial property policies contain a coinsurance provision that can reduce a claim payment when the property is not insured to the required value. OIA’s guide to coinsurance in commercial property insurance explains how this provision can affect a business after a loss.
For companies with multiple locations, confirm that every property is listed correctly and that the appropriate building, equipment and inventory values are assigned to each address.
5. Recalculate Business Interruption Coverage
The physical damage caused by a fire or another covered loss may be only part of the financial impact.
Your company may also lose income while continuing to pay payroll, rent, loan payments, taxes and other expenses. Business interruption insurance, also known as business-income coverage, is intended to address certain lost income and continuing expenses following a covered interruption.
This coverage should not be carried forward automatically each year.
Consider:
How long it could realistically take to resume normal operations
Which expenses would continue during a shutdown
How long it would take to rebuild or replace specialized equipment
Whether permits or supply-chain issues could delay recovery
Whether customers might permanently move to a competitor
Whether the company depends heavily on one location
Whether a loss at a key supplier could affect operations
Whether extra-expense coverage could help the business operate elsewhere
How an ordinary-payroll limitation could affect employee retention
It is also important to understand what triggers the coverage. A shutdown caused by covered physical damage may be treated differently from one caused by a cyberattack, flood, utility failure, or supply-chain disruption.
6. Review Liability and Umbrella Limits
Many companies carry a standard $1 million general liability limit because that is what the policy provides or what a contract originally required.
That does not necessarily mean it is still sufficient.
Review liability limits in relation to:
The company’s size and financial position
Products manufactured, sold or distributed
The possibility of severe bodily injury
Company-owned vehicles and fleet activity
Work performed at customer locations
The number of people visiting company premises
Contractual insurance requirements
Operations in multiple states
The potential for one incident to involve multiple claimants
Customers, landlords and general contractors may require $2 million, $5 million or more in total liability coverage. These requirements may be addressed through a combination of primary liability insurance and commercial umbrella or excess liability coverage.
Confirm which policies are actually scheduled beneath the umbrella. An umbrella may extend over general liability, commercial auto, and employers liability, but the exact structure, exclusions, and required underlying limits can vary.
The appropriate liability limit should be based on your company’s exposures and contractual obligations—not simply what another business carries.
7. Examine Contracts and Insurance Requirements
Customer contracts, leases, loan agreements, and vendor agreements can contain insurance requirements that are easily overlooked during renewal.
These agreements may require:
Specific liability limits
Commercial auto insurance
Professional liability coverage
Cyber liability insurance
Additional insured status
Primary and noncontributory wording
Waivers of subrogation
Completed-operations coverage
A certain financial-strength rating for the insurance company
A certificate of insurance provides evidence of coverage at a point in time. It does not modify the policy or guarantee that every contractual requirement has been satisfied.
Review contracts before renewal so the insurance program is structured appropriately. Waiting until a certificate is urgently needed can create delays—or reveal that the required protection was never included.
8. Evaluate Cyber, Crime and Social Engineering Risks
Most established businesses rely heavily on email, cloud-based platforms, electronic payments and third-party technology vendors.
At renewal, involve the person responsible for the company’s technology and security. Confirm whether the company has:
Implemented multifactor authentication
Created offline or segregated backups
Trained employees to recognize phishing attempts
Established wire-transfer verification procedures
Developed an incident-response plan
Removed access for former employees
Evaluated third-party technology providers
Increased the amount or sensitivity of stored information
Cyber policies can differ significantly. Depending on the policy, coverage may address data breaches, ransomware, business interruption, regulatory investigations, and liability claims.
A cyber policy also may not automatically provide enough protection for every type of fraudulent payment.
OIA’s article about a $95,000 social engineering fraud claim explains why businesses should separately review social engineering and funds-transfer fraud limits.
You can also review OIA’s cyber liability insurance guide for a broader explanation of the coverage.
The cyber application is an important part of the policy. Review answers about cybersecurity controls with the appropriate IT personnel before submission.
9. Review Management and Employment-Related Risks
As a company grows, its management and employment exposures often become more complicated.
Consider whether the company needs to add or update:
Employment practices liability insurance
Directors and officers liability insurance
Fiduciary liability insurance
Crime and employee theft coverage
Professional liability or errors and omissions insurance
Changes in ownership, executive leadership, investors, employee count or benefit plans can affect these policies.
A privately held company can still face claims involving hiring, termination, discrimination, harassment, management decisions, fiduciary responsibilities or disputes among owners. These exposures are not necessarily covered by a commercial general liability policy.
General liability can include personal and advertising injury protection, but its application depends on the allegation and policy language. For an example of how a less obvious liability exposure could affect a business, read OIA’s guide to general liability insurance and social media defamation.
10. Review Workers’ Compensation and Commercial Auto
Workers’ compensation and commercial auto claims can significantly affect a company’s insurance costs.
For workers’ compensation, confirm:
Payroll is assigned to the correct classifications and states
Officers are properly included or excluded
Remote employees are assigned to the correct work state
Subcontractor information is being collected
The experience modification factor is accurate
Open claims are being actively reviewed
Return-to-work procedures are in place
An incorrect classification can materially affect the premium. OIA’s explanation of workers’ compensation class codes and audits provides more information about how employee duties can affect the cost of coverage.
For commercial auto, review:
The current vehicle schedule
Authorized drivers
Driver eligibility standards
Motor vehicle record procedures
Personal use of company vehicles
Hired and non-owned auto exposure
Telematics or driver-monitoring practices
Accident reporting and driver training
Commercial auto liability limits
A business does not need to own a large fleet to have an auto exposure. Employees who use their own cars for company errands, deliveries, customer visits or travel between locations can create liability for the employer.
Our article about employees using personal vehicles for work explains how hired and non-owned auto coverage may help address that exposure.
11. Review Estimated Exposures and Prepare for the Premium Audit
Many workers’ compensation and general liability policies begin with estimated payroll, sales or subcontractor costs.
After the policy term ends, the insurance company may conduct a premium audit using the company’s actual figures. If the original estimates were too low—or the company grew significantly—the audit can result in a substantial additional premium.
Before renewal, compare:
Estimated payroll with actual payroll
Payroll by state and employee classification
Estimated sales with actual sales
Subcontractor costs
Certificates of insurance collected from subcontractors
Officer inclusion or exclusion status
New job duties that may require different class codes
Operational changes during the policy term
Adjustments made during the previous audit
A large audit bill does not necessarily mean the insurance company made a mistake. It may result from business growth or estimates that were not updated during the policy term.
However, incorrect classifications, charges for properly insured subcontractors or inaccurate audit figures should be reviewed and questioned.
The renewal is a good time to compare the expiring estimates, current actual figures and projections for the next policy period. This can help the CFO budget more accurately and reduce the chance of another unexpected adjustment.
OIA can review your current insurance program, audit exposures and recent business changes before your renewal deadline.
12. Decide Whether the Program Should Be Remarketed
Remarketing means approaching alternative insurance companies for proposals. It can be useful, but it should not be an automatic exercise based solely on price.
Remarketing may make sense when:
Premiums have increased substantially
The current carrier’s appetite has changed
Coverage has been restricted
The company has outgrown the existing program
New operations require different underwriting expertise
Claims or service issues have not been handled well
The business has improved its loss history or risk controls
Better coverage may be available elsewhere
Remaining with the current carrier may still be the right decision. Coverage stability, claims handling and a strong long-term carrier relationship can have real value.
The goal is to determine whether the current insurance company remains the right fit—not to move the account simply because another proposal is slightly less expensive.
13. Compare More Than the Premium
A lower premium doesn't always mean a better insurance program.
When comparing proposals, review:
Coverage limits
Deductibles and self-insured retentions
Major exclusions
Property valuation methods
Business-income limits and waiting periods
Umbrella and excess liability terms
Additional insured provisions
Defense costs
Claims-handling capabilities
Carrier financial strength
Audit provisions
Payment terms
Risk-management services
A proposal should clearly identify meaningful differences from the current program. If one option costs less, the CFO should understand whether the savings come from more competitive pricing, higher deductibles, narrower protection or reduced limits.
Your broker should be able to explain the differences in plain language and help you present the options to ownership or management.
14. Verify the Policies After the Renewal
The renewal process does not end when the company accepts a proposal.
After coverage is bound:
Confirm that every requested policy was issued
Review the named insureds and business entities
Verify locations, vehicles and property values
Confirm effective dates
Check requested endorsements
Provide certificates to customers, landlords and lenders
Update internal claim-reporting procedures
Calendar premium audit and reporting deadlines
Save complete policy copies in a central location
Notify the appropriate employees about coverage changes
Quotes, proposals and binders provide important information, but the issued policies contain the actual coverage terms. Any discrepancy should be addressed as soon as possible.
A Better Renewal Starts With a Better Review
For a growing company, commercial insurance should not be treated as an annual paperwork exercise.
The renewal should connect your insurance coverage with the company’s current operations, financial position, contracts, and plans for growth.
Starting early gives your leadership team and insurance broker time to identify potential issues, evaluate options, and decide without the pressure of an approaching expiration date.
At The Overmyer Insurance Agency, we help established businesses throughout New Jersey, New York and Pennsylvania review and coordinate their commercial insurance programs. We help our clients understand their coverage, compare options, manage audits and navigate claims when they occur.
If your company’s renewal is approaching, contact OIA to schedule a commercial insurance program review. We can help you evaluate what has changed, identify areas that may need attention and prepare for a more effective renewal.
Get a Second Opinion Before You Renew
If your company has grown, added locations or taken on new contracts, your current insurance program may need more than a routine renewal. OIA helps established businesses review coverage, identify potential gaps and compare available options.
Insurance coverage varies by company, policy, endorsement and individual circumstances. This article provides general information and does not alter or replace the terms of any insurance policy.
Frequently Asked Questions About Commercial Insurance Renewals
How early should a company start its commercial insurance renewal?
An established business should generally begin the process approximately 90 to 120 days before renewal. More complex accounts may need additional time, especially if the company plans to approach alternative insurance carriers.
What information is needed for a commercial insurance renewal?
Commonly requested information includes updated revenue, payroll, employee count, locations, property values, vehicles, drivers, loss runs, contracts, ownership information and details about operational changes. Requirements vary by industry and coverage.
Should a business remarket its insurance every year?
Not necessarily. Remarketing may be appropriate when pricing, coverage, operations or carrier appetite has changed significantly. However, moving coverage every year based only on premium may sacrifice valuable coverage stability and carrier relationships.
What should a CFO compare besides insurance premium?
A CFO should compare limits, deductibles, exclusions, coverage terms, property values, business-income protection, umbrella structure, carrier strength, claims service and audit provisions. Any major difference in premium should be reviewed alongside the difference in coverage.
Why can a company receive an additional premium after an audit?
Workers’ compensation and general liability premiums may initially be based on estimated payroll, sales or subcontractor costs. If the company’s actual exposures are higher than estimated, the audit can generate an additional premium.
What business changes should be reported at renewal?
Report new locations, states, entities, products, services, vehicles, equipment, employees, subcontractors, contracts and changes in revenue or payroll. Any significant change in how the company operates should be discussed with your insurance advisor.
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