Insurance reviews - what are they and why does your business need one?

In your personal life, you may well do an annual comparison check on home, contents, car, and travel insurance policies, changing things up depending on your need, overall expense, and any additional cover advantages. But when it comes to business insurance that’s match-fit for the hospitality sector, the considerations and cost are very different.

In this article we explore why it makes sense to conduct regular insurance reviews for your business, and the types of review on offer.

What is an insurance review?

An insurance review – sometimes called a broker tender - is a robust evaluation of your current business-related insurance policies to ensure they still meet your needs and offer adequate protection, whether you’re running a hotel, restaurant, or bar.

Amongst other things, a review should identify coverage gaps, allowing you to adjust policies if and when your business structure, operations, processes, personnel and so on change to the extent that your risk profile is altered.

Why is a business insurance review necessary?

Well, it could save you money and give your business a better set of protections for a start. Here are the main reasons a review is a worthwhile annual task:

• Changes in your business operations: Your insurance needs will vary as your business grows or shifts focus, or even downsizes. Last year’s coverage may have been more than enough, but you should treat this year’s renewal as fresh. 

• Regulatory requirements: Compliance with industry standards and government regulations cannot be avoided – so you’ll need to keep a close eye on whether your current coverage aligns with laws and regulations.

• Asset protection: Buildings, products, and equipment are just part of your asset portfolio. Transport vehicles, intellectual property (patents, trademarks) all need to be assessed, protected, and valued as these may be sold off, added to, or even contested. 

• Cost efficiency: This bottom bullet is the bottom line. Nobody wants to be paying more for something than they absolutely need to. And nobody in the hospitality world wants to face the prospect of being underinsured, either. A regular business insurance review means you’re paying what you need for the services you need.

Three key questions to consider

1. Do I trust my broking team to be expert and impartial?

2. Do they deliver a great service at a fair price?

3. Have they the credentials and market leverage to deliver that service and price point?

What type of review does my business need?

1. Conceptual review

Many opt for a conceptual review. Based on pre-set questions and protocols, and with a transparent scoring system and clear deadlines, it’s a system that usually evens out the broker playing field following the initial submission of a ‘Request for Information’ (RFI) that comprises of evidence, capabilities, service, risk, and potential insurance solutions.

The main advantages are that you can ascertain clear comparisons between possible vendors and this review can be undertaken at any time. This also lets you pre-set contracts and SLAs, and allows prospects to properly understand your business, while you dig deep into their ways of working before anything is formally agreed.

On the other hand, you’ll need to review multiple brokers – many of which may seem to offer similar terms, but not all of whom will be a good insurance partner.

2. The ‘tender light’ approach

You may wish to consider this if you want to balance out the formality of meeting compliance guidelines with a less rigid process of opening up talks with brokers you already have a relationship with. This streamlined approach combines the transparency of fair testing without some of the burden and time of admin, as you’re already likely to have some of the broker’s background information. So, you can reduce the RFI and move more quickly onto the RFP (Request for Proposal).

3. The silent review

This method is quite different. One broker at one time (and at any time) will work confidentially to assess your current insurance and risk programme, with the goal of providing an analysis of your cover, cost, service levels, and future risks. The ‘silent’ aspect rests upon this remaining unknown to your present broker and there should be no approach to the insurance market.

4. The costed review

Once the most popular type of insurance review as it was mainly based on who could come in with the lowest cost for the best cover, it’s now often seen as a bit ‘basic’ – especially for hospitality clients, who rightly expect a more holistic approach to reducing risk and reducing claims.

Limiting an insurance review to such narrow perimeters gives underwriters and brokers much less to work with, which in turn means clients may not get the broadest range of insurance options.

While there are other ‘variations on a theme’ when it comes to carrying out a business insurance review, the ones outlined above should give you food for thought.

Interested in a review? Contact Max Palmer-Jeffery, Client Relationship Manager, who will be happy to direct you towards the right review for your business.