I often read in the letters written by my insurance broker that I should notify them of any changes. What kind of changes should I be telling them about?
Since changes to the Insurance Act (2015) there is now a greater onus on the broker or insurer to obtain correct and up-to-date information, to ensure you have an appropriate policy that will meet your needs and hopefully respond in the desired manner in the event of a claim.
That said, for practical reasons they won’t ask you as many questions as they should have done when you first took out the policy. However, they will normally supply you with a schedule of your existing cover in one shape or another and ask you to notify them of any changes.
Telling your broker or insurer about changes at renewal is not the only time you have a duty to advise them of any alterations to what needs to be insured or your circumstances. If there is a significant change at any time during the policy period you should contact them as soon as realistically practical.
These are some of the most common reasons to notify during a policy period rather than waiting until renewal:
1) If you become aware of a situation that you feel may give rise to a claim. Claims happen, that is why we buy insurance, but the sooner you can notify the broker or insurer the sooner they can try and make enquiries and consider negligence, track down witnesses, offer assistance and so on. I will try to write a more expansive article on this in the near future, as it’s probably a whole article in its own right
2) If there is a change of name or ownership of the business, or any other change to the insured entity such as changing from a sole trader to a partnership or limited company.
3) Change of address. If your policy is liability only, this should just be a clerical matter. However, if you have cover for stock, contents or buildings, other material damage or terrorism insurance, the address could be a rating factor and affect the premium, excesses, security requirements and so on.
4) Adding extra locations or increasing sums insured. Good insurance policies will have a capital additions clause which means that if your sum insured goes up by up to 15% (usually, though that figure could differ) then you do not need to advise, but if the figure will exceed that, you should do, as there could be extra premium chargeable.
5) Change of Business Description. The Business Description is the most important line of any policy schedule, this is what the insurance company believes you do. If this does not truly reflect your business there is a high chance your policy could be invalidated and any claims refused. If 20% of your income is from market trading and 80% from online sales for example you would not be considered a market trader (unless agreed) rather an online retailer that does some market trading.
6) Sale of goods to USA/Canada. This is a common exclusion under most insurance policies but can sometimes be covered, if you do this it should be notified.
7) If you feel there may be dual insurance because you have purchased a separate policy elsewhere where it is possible some covers could overlap.
There are other circumstances too for different types of insurance such as motor insurance, directors and officers and professional indemnity, which have not been addressed in the above list. Though hopefully this will be a handy guide for the consideration of most small businesses and traders.