Keep these points in mind…
Many underwriters who exited the market during the pandemic are now re-entering, and with premiums having stabilised, it’s likely that underwriters will need to find alternative ways of enticing customers in order to remain competitive. This could mean they offer lower prices, increase the amount of coverage, or provide different clauses.
It’s prudent for purchasers to revisit cover as there might be an opportunity for EngInsure to find a more competitive option for your business.
EngInsure can assist you when revisiting your insurance policy, here’s a breakdown of some key points that engineers need to be across when revisiting their policy.
1. Why is it important for engineers to regularly revisit their policy?
Regularly reviewing your policy is an essential part of managing your insurance cover. It can provide the confirmation that you’re on a cost-effective policy that’s well-suited to your professional needs, or it could signal other options in the market that offer a more competitive price point or better coverage.
2. How often should engineers revisit their policy?
As a rule of thumb, revisit your policy at least once a year. This aligns with most insurance policies that need to be reviewed or updated on an annual basis.
However, when there’s been a major change in your business, it’s critical to revisit your policy more regularly and consider how the change will affect your cover and renewal rate. Major business changes could include factors such as the number of projects being undertaken as well as the cost involved or working on projects of a different nature. For example, if an engineer previously involved in plug and play work has recently started to take on higher-risk designs, it’s essential to declare this change to your broker. They can check if your current policy covers the new type of work.
As well as considering any major business changes that have already occurred, you should also look ahead to anticipate business movements that could impact your cover.
There’s also value in revisiting your policy during a quieter period. You’re more likely to get quotes and quicker responses from underwriters than during a frantic period when there’s a rush of people looking for quotes at the same time.
3. What steps should engineers take to determine which policy is best suited to their needs?
It’s always best to seek professional advice. Your first port of call should be a broker – ideally one with experience dealing with insurance in the engineering sector such as EngInsure. Depending on the nature of your insurance policy, it might be relevant to seek legal advice.
It’s also important to evaluate the terms of each policy. Discuss the specific clauses with your broker and the level of coverage each policy provides. This should include checking for factors such as:
· Liability limits: Is the amount of cover provided under your policy adequate to protect your business?
· Excess: How much excess do you need to pay before your coverage kicks in?
· Cancellation clause: Some policies include a clause for policy termination, which means your policy could be terminated and a premium refunded on a pro-rata basis. One way of ensuring you maintain some coverage after the cancellation date is to have a run-off cover period included in your contract.
· Bodily injury and property damages: It’s not uncommon for these to be excluded from a PI policy, so if you want to be covered for this kind of damage, you may need to have a specific clause added.
· Retroactive date: How far back in time can a loss have occurred in order for you to be covered by your policy?
· Territorial and jurisdictional limits: If your company provides products and services to or in other countries, make sure your policy covers this.
4. What are the benefits of using a broker?
Having a strong working relationship with your broker means they’re better-positioned to find policies that meet your professional needs.
A broker can answer any questions you have about your insurance – for example, if you want to know whether a major change in your business is covered by your policy, or whether you can change some elements of your coverage.
A broker can also help scope out any new opportunities in the market.
5. What information should I disclose to my broker?
It’s best to disclose as much information as possible. The more that’s declared, the easier it is for a broker to define the scope of your company’s work. This can help the broker to determine the type of policy that’s best suited to your professional needs.
When disclosing information to your broker, make sure to declare your company’s past, current and future professional activities. Even if your company is no longer performing a particular activity, you should declare this information since professional indemnity claims can arise years after the work was performed.
All information should be provided to your broker at approximately 6 weeks before your policy is up for renewal. Keeping good records throughout the year and approaching your broker early will help to make the process of revisiting your cover a smooth and seamless one.
EngInsure are here to support you with important PI Insurance advice and solutions to reach the best possible outcome for your business. For assistance, please get in touch with one of our specialists:
T: 1300 854 251
E: info@enginsure.com.au
This article is not intended to be personal advice and you should not rely on it as a substitute for any form of personal advice. Please contact Whitbread Associates Pty Ltd ABN 69 005 490 228 License Number: 229092 trading as EngInsure Insurance & Risk Services for further information or refer to our website.
