Renewing Your Business Insurance Policy

Taking stock of the previous year will help you better plan for the upcoming year, and ensure that your insurance policy is most up-to-date for you and your company’s needs.In this episode of Risky Business, Colin Rooke talk about the importance of an annual review of your business insurance policy.

Listen to the full episode here, or read the full transcript below

Paul Martin: Welcome to Risky Business Commercial Insurance with Butler Byers. This is Paul Martin, business commentator on CKLM. And you have heard me for the past couple of years talking with Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance. We’ve been talking about the Butler Byers Risk Assessment System, a unique proprietary step by step system that helps business owners sort through all of those complicated questions that come up on not just insurance, but really about the broader picture of running your own business. So Colin, welcome as always, great to chat with you.

Colin Rooke: Thanks Paul.

Paul Martin: Here we are launching, you know, we’re, we’re sort of five or six weeks into the new year. And at this time of year, I’m sure you guys are planning and laying out the schedule of all of your clients’ renewals. Every year you have this comes up and I thought let’s talk about the annual renewal process for a client that has a policy that you’ve put together for them as their broker. What steps do you go through? I mean, is it the standard is send me a bill and I pay it or is it a little more elaborate than that?

Colin Rooke: A good point, and really timely subject. There’s a lot of companies that have their insurance policy renewal that coincides with year end. So there’s a lot of work to be done in October, November, December. So, okay. You know, maybe that’s all done. Maybe it isn’t. But what … What we require, I’m gonna start there with, okay, what normally happens? And if you’re a business owner that’s listening, this is not gonna be news to you, but I just wanna set the stage for really what has to occur.

Paul Martin: And while you say it won’t be news to them or new to a business owner, there are always a business owner can make this a better exercise.

Colin Rooke: Yeah, absolutely. So just to go with the basics, every year as brokers we are required to ask certain questions. The renewal can’t be done otherwise. The underwriters aren’t gonna … They’re not going to provide renewal terms if we don’t provide updates. So again, business owners are used to having to provide updates every year. And really what I wanted to get into is what can we do with those updates when we look at the questions and the answers a little differently, more from a proactive risk management standpoint? So every year, big question is any changes to your operations? They want to know have you done anything differently? Were you a retail clothing store that’s now getting into dynamite manufacturing in a big way? They need to know that. It’s all part of the rating, quite frankly. Have you done something that we’re going to need to charge you more for that operation?

Colin Rooke: So we have to cover off that. Another thing is any changes or additions or deletions to your property or stock. So are you are ramping up? Are you gearing down? What’s going on? Do we need to change the limits? And again, standard stuff we’re all required to ask. Another big factor when it comes to liability is your annual sales or we call them receipts in the broker industry. But we want to know where did you end up last year? And where do you think you’ll be? And again, from an underwriting perspective, is your liability premium going to remain roughly the same or are we going to get away with, you know, a little extra because more sales means more opportunities for lawsuits, more opportunities for things to go wrong. So it’s just another big measurement tool and then any changes to the coverages. So, often brokers will ask the client, is there anything else that you think you need? It’s always a question that I’ve struggled with, but it is something that we need to go through and say, “Are there any sort of, I guess, gaps that you see? Anything that we need to change?”

Colin Rooke: We have to cover that off just to make sure that we’ve presented what’s available, I guess, effectively and for errors and omissions reasons, we want to make sure we have that talk. So those are the standard questions that business owners are used to getting asked.

Paul Martin: You last one, is there anything else that I should know about? You’re basically asking the business owner that question. In large measure, I wonder how many business owners think they’re well equipped to answer that question. I mean, they would look at you and say, “Well, you’re the expert. That’s why you’re here. You tell me what I need to know.” How do you reconcile that?

Colin Rooke: You know. Yeah, absolutely. I mean, it’s something where we’re saying, “Well, we don’t want to get into any trouble, so we’re gonna ask the client if he or she thinks she needs something and if they say no, we’re okay.” So, jumping ahead to our risk reduction process, that process allows us to answer these questions on behalf of our client with ever having to ask.

Paul Martin: So really a business owner should expect more of their broker than just anything else I should know.

Colin Rooke: Exactly. Exactly. I mean, if, if you’re working a plan, if everyone’s on the same page, if you’re following something like our step by step process, we’re the ones uncovering … you know, we’re uncovering together what you might need now or what you’re going to need in the future. And that’s the whole point of this is there are no surprises because we’re working together on something ongoing and I already know what you have planned for the future. For example, changes to operations, we should have already had that talk. We should already know that it’s something that was on the horizon and that we’re working towards from a risk perspective on our end and that we have a plan together. And quite frankly, the markets that we choose, the insurance markets, should be also based on that conversation and where the client’s going.

Colin Rooke: So if you’re right now in retail clothing, the example I used earlier, but you’re planning on getting into dynamite manufacturing a big way, we need to find a market that’s going to be okay with that obviously, because what if it happens midterm midway through the policy? You’re saying, “Okay, those dynamite manufacturing plans I told you about? It’s happening Monday.” That’s a big part of the conversation so we don’t find out at renewal that six months went by where you wouldn’t have coverage, that the carrier you’re with can’t insure you, couldn’t have insured you. So it’s really important to have these conversations.

Paul Martin: I guess that’s where I was going to go next is sort of what do you do with the information? You ask these questions. You glean information. What do you then do with it and what should I as a business owner expect you as a broker to deliver back to me with that information? It’s a kind of a big question.

Colin Rooke: You know, it is. And I say that’s where we’ve really changed the game. So rather than take that information and report back as we’re supposed to, make any changes to the policy, review the terms, present, negotiate premium … I mean, that’s what’s required. That’s the bare minimum. We take that information, we relay it back, we present it to our client and we basically change the cost structure of that policy. But where we’ve changed that is those questions all … or the answer to those questions, they all open up new conversations that we’re going to have throughout the year, again, about proactive risk management. I mean, as we’ve talked about quite a bit, our job, the way we see it is we identify risks for our clients. From there, we organize that risk for our clients. We then quantify that risk, so again, discussing the cost of that risk. And we prioritize as part of the plan. And this is … these questions are all gonna play a very important part in that plan.

Paul Martin: So information gathering, being the detective, if I can put it that way, is as important as your technical knowledge of what insurance markets are.

Colin Rooke: Yeah. You know, it, it tells us where we’re going throughout the year. So if you’re looking at risk, if you’re looking at the business differently and not through the eyes of an insurance policy, and you’re really thinking critically, even if you’re not doing something like this risk reduction workshop that we do at Butler Byers, if you change the way you think, you can approach the account a lot differently and you can learn a lot from just standard questions we’re required to ask. It’s just it’s what you do with those answers.

Paul Martin: All right, we’ve got to take a little break. You’re listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance, and you’re listening to Risky Business. We’ll be back after this break. Well, welcome back to Risky Business. This is Paul Martin. As always, I am speaking with Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance. And Colin, just before the break, you kind of said something that tweaked my … I heard something here that I just want to explore a little bit. You said kind of your job is as a detective or is to route around this information. But you made it sound like your job is to be less of an insurance broker, meaning I have access to a lot of insurance companies, to more of a risk manager. Did I catch that right?

Colin Rooke: You know? Yeah. If we’re doing our job properly, that’s exactly how the client should feel. So we often say we spend about 25 percent of our time with the purchase and placement of insurance. And that’s not the norm and we’re not saying we give it any less attention, but we’ve just added in so much more proactive risk management to that equation. So what you’ll find is, again, a lot more on the advice side, on the strategy side of risk. And it really started for us looking at our clients, looking at their risk, looking at having these conversations, listening to them and saying “There really is more we can and there really is more we should be doing for our clients.” So back to the original questions that we’re required to ask every year, we’re listening for different things now that we’ve changed our whole approach to risk. Something like updated sales receipts. Okay. Yeah, it tells us if you had a good year or a bad year, a bad year going into a good year, but it also tells us so much more about maybe where the company is going. So if a company is saying, “Well next year, we’re projecting triple the sales.”

Colin Rooke: We say, “Okay, well are you prepared for that? What have you done to prepare for that? Have you communicated that message from the top down that this company is ramping up for this reason? Do you need to change the way your salespeople operate?” And from there … And we talk a lot about the tools we have in our tool kit for our clients. Well, they’re all developed based on, again, these conversations. So okay, we’ve uncovered the need, we understand our clients ramping up, their receipts have tripled. There’s gonna be some risks. Now what?

Colin Rooke: We’ve had that conversation, what can we do? And that’s when we go back and develop resources where we can come back to our clients and say, “We’ve developed something that we can work together on, and I think we can help you navigate through this problem.” I mean, we have models for not only increasing sales, but we have a completely different model for a vertical growth approach to sales. So again, if you are going after three times, that’s a totally different business plan. It’s a totally different way of looking at the same problem as just consistent steady growth. So we have different tools just for that.

Paul Martin: And I guess that’s the point here, isn’t it? I mean, we have this conversation every week on the show. And I’m sure business owners are listening to it, and we catch their interest. They’re intrigued about what we’re talking about. But they’re probably wondering what’s the tangible output or what do you bring to me? You talk about a plan, let’s talk about the plan. Let’s tell … tell a business owner what they can expect from you after you’ve done this discovery, as you call it, and you’ve gathered up this information. So what should I expect from you? And if not you, someone.

Colin Rooke: So the big difference you’ll see is, okay, we’ve had this talk, we’ve organized it in a way where everyone is on the same page, and then we have an approach throughout the year. Here’s what we’re gonna do, here’s how we’re going to address this problem. We’re going to let you know who’s required to do what. Is Butler Byers doing this for you? Are we doing this together? Are we going to give you this tool, and we’re going to follow up? Are we going to hire a third party to help work on this together? Are we going to be part of hiring that third party? So, there’s a plan in place. Often our initial meetings … it’s not the the intent, but we definitely create pain. We definitely uncover areas of anxiety when we’re talking about risk. No one has it all figured out. And even if you did, there’d be something new. And we’d help with that, but we create this anxiety, we create this pain. Then we come back together and we say, “Look, yes, there’s some work to be done here and here’s how we’re going to address that. And here’s the plan, here’s what you’re gonna do, and here’s the tool that we’ve developed, a very in depth tool that you can work through and solve this problem.” Have a better handle on it anyway.

Paul Martin: What I’m gathering here though is … I mean, when we started this conversation today, it was about the four questions a broker must ask at renewal time. You’re telling me there’s a … that triggers, should trigger, a whole lot more stuff than just four answers.

Colin Rooke: Yeah. You know, four answers could trigger years worth of work. And that’s not even sort of part of our risk assessment system. So if you can only imagine we’re eager to uncover when we’re changing the conversation, when we’re changing the way the client thinks about insurance and risk … just think of all that we could be doing by just focusing, more … or less, sorry, on the insurance policy, and more on the insured, the client, their risk.

Paul Martin: Well, it’s interesting. In previous shows, we’ve talked about how you can reduce premiums and some of the factors that go into that. You’ve had success to the tune of lowering client premiums by 20, 30, 40 percent.

Colin Rooke: Yeah.

Paul Martin: And it’s not just magic, it’s all part of this process that you have that’s much more detailed than your traditional call from the broker that says, “Hey Joe, your policy’s up for renewal. Anything new to report?”

Colin Rooke: And you know, just back to premium savings, we always share what we’re doing with the insurance company.And the design there too is to … We are ultimately selling our clients back and we’re just trying to show … I mean, the underwriter quite frankly might have no interest at all in the work we’re doing on ramping up the sales effort. But  what the intent is, is we’re showing the insurance market you are a better class of business, you are worth betting on. You see a problem, you address it. With us, there’s a plan in place and we’re gonna work on it as opposed to a similar type business that isn’t working on risk, that isn’t working a plan, that isn’t sharing that information. And it’s all about presenting our clients in the best light to the insurance market and also working on the bottom line with our existing clients.

Paul Martin: So the more knowledge and information you have about your client, the better job you can do representing them, telling their story, I think you called it.

Colin Rooke: Absolutely.

Paul Martin: And it starts with these basic questions. And it’s something that a business owner, excuse me, should expect of their broker when that annual review time is upon them.

Colin Rooke: Yeah, you’ll get the questions. It’s just what happens after that, that’s the big differentiator between our approach and I’ll say the traditional approach to a commercial insurance.

Paul Martin: Well, as always Colin, the time goes by so quickly. I don’t know how it does go by so fast, but we’ve come pretty much to the end of another program. So thanks for joining us. And in keeping with the show, is there anything else I should know?

Colin Rooke: Risk wise? Well, considering we’re here every week, there’s going to be something new that I think everyone should know absolutely every single week.

Paul Martin: Colin, thanks very much. You’ve been listening to Colin Rooke, the commercial risk reduction specialist with Butler Byers Commercial Insurance. I’m Paul Martin. This is Risky Business. Thanks for joining us.