During this time of year, many organizations are likely focusing on important Q4 initiatives to close out the year on a high note. Often, contract renewals move to the back burner until December or January. However, insurance contract renewals should be reviewed carefully and promptly. For instance, organizations should review their insurance renewal terms no later than one quarter before the actual renewal date. Today is a great time to begin the process of securing the most beneficial insurance contract for your organization.
Prevent Rate Increases
Hidden fees can easily creep into your insurance contracts at the time of renewal. Increases may start small, but add up to a large sum over time. For this reason, organizations should allow ample time to negotiate with their insurance broker. Some organizations may not find any discrepancies in their contracts and allow their agreement to reactivate as is. Nevertheless, adequate preparation to secure any necessary contract term changes is critical.
The Waiting Period
Your organization’s incumbent broker has the right to block other insurance brokers. As a result, shopping around for a more suitable broker can be hindered. As a result, shopping around for a more suitable broker can be hindered. An insurance company (and subsequently the insurance underwriter) is only allowed to give a quote to one broker. Your organization will have to provide a broker of record letter to a different broker if you desire to switch brokers. The incumbent insurance company waits ten calendar days before quoting to a new broker to allow the incumbent the opportunity to win back the business.
Breakdown of Services Provided
An insurance broker should be able to articulate the specifics of their services. Brokers should be ready to outline their credentials, industry specialization, consulting expertise, insurance company relationships, and specific services whether it is managing your account, loss control services to mitigate and prevent losses from happening, and/or claim services, along with disclosure of their compensation.
Many organizations are unsure of the exact payment their broker is receiving in compensation. For this reason, timeliness is essential to allow the insurance broker with the proper amount of time to provide their services and compensation.
Executive leadership should proactively review policy terms and conditions before the renewal date(s) to secure the best terms and savings. A solid, pre-renewal strategy will ensure your organization has the best insurance renewal possible.
About the Author:
Marlys Schmitt is an experienced Consulting Partner of ERA Group in Minnesota. As an advisor and advocate, her focus is to build strong relationships and deliver comprehensive cost containment solutions for her CEO and CFO clients. During her tenure with ERA Group, Schmitt has led reviews of over $20 million in expenses and completed over 100 client projects.