Business insurance: too late to review your contracts?

The deadline for termination is not the time when the analysis should begin: ideally, it should already be completed. Effective competition requires time, reliable data, and a comparison that goes beyond just the premium alone.

1. First step: check the deadlines… contract by contract

As the end of the year approaches, many companies are wondering if it is still time to review their insurance policies. The answer depends first and foremost on the contracts in question: there is no single termination date that applies to the entire portfolio of insurance policies.

For many contracts subject to the Insurance Contract Act (LCA), there is an ordinary right of termination, particularly at the end of the third year and each subsequent year, subject to a three-month notice period. However, more favorable provisions may be provided, and certain branches follow specific rules. Moreover, the insurance year does not necessarily end on December 31st.

The famous «30th of September» is therefore not a universal rule. Before taking any action, it is necessary to check the policy, the general conditions of insurance (CGA), the expiration date, and the termination terms specific to each contract.

2. A price increase can reopen a window of termination

This mechanism is still often misunderstood. A company that has not terminated its contract within the normal timeframe can thus have a new opportunity to act when it receives a new policy, a notice of renewal, or a communication announcing an increase in the tariff.

The deadlines and procedures vary depending on the insurers and the products. Therefore, it is necessary to examine the applicable CGA before concluding that a deadline has been definitively passed. Some market conditions provide for information a few weeks before the end of the insurance year, while others require several months in advance.

3. The date of termination is not the date of the start of the tender process

Even when a contract can still be terminated, this does not mean that it is wise to wait for the final few weeks to launch a tender process. A genuine analysis takes time.

Before questioning the market, it is necessary, among other things, to understand the company’s current activity, identify the changes that have occurred since the last analysis, verify the existing coverages, collect the relevant data, and study the claims experience. It is then necessary to define the desired guarantees and conditions so that insurers can be approached on a comparable basis.

As an example, a tender for personal insurance generally requires information such as staff numbers, salary levels, the coverage sought, certain specific clauses, and accident statistics. Incomplete or late data can slow down the market consultation or make it difficult to compare offers.

This is followed by any questions from the insurers, the analysis of the offers received, negotiations, the recommendation, and finally the company’s decision. A good competitive bidding process therefore takes place several months before the deadline – not a few days before the termination.

4. Competing does not necessarily mean changing insurers

The objective of a tender is not to change insurer at any cost. It is first of all about checking whether the existing solution remains suitable for the company’s situation and the market.
It happens that the current insurer remains the best option, possibly after renegotiation. In other cases, the analysis may highlight a premium that has become less competitive, insufficient guarantees, poorly adapted deductibles, contractual limitations, or services that are less interesting than those offered by the market.

The price is naturally part of the decision. But it should be analyzed after verifying that the compared solutions offer a level of protection that is truly comparable.

5. When should a market analysis be particularly considered?

• A significant increase in premiums;
• Several years without a real portfolio analysis;
• Significant growth in headcount or revenue;
• A new activity, new products or new markets;
• A move, new premises or significant investments;
• A marked evolution in the incidence of accidents;
• Or simply covers that no one really knows if they still meet the company’s needs.

In these situations, the right question is not necessarily «should we change insurer?» but rather:

«If we had to build our insurance program from scratch today, would we still choose the same coverages and the same partners?»

6. And what if the deadline is already very close?

Even when the deadline approaches, one should not automatically conclude that it is too late to act.

The first step consists of verifying precisely the provisions of the contract and the general conditions. In some cases, a tariff adjustment or a modification of the contractual conditions may open up a specific right of termination, distinct from the ordinary termination period. The receipt of a new policy or a renewal notice containing an increase in the premium therefore deserves careful examination.

Another option also exists: ask the existing insurer to postpone the termination period.

In practice, some insurers, depending on the situation, agree to extend this period from one to three months, in order to give the company time to analyze its needs, solicit the market, and compare the various solutions.

However, this possibility is neither automatic nor provided as a general right of the insurance holder. It must be negotiated with the insurer and ideally confirmed in writing. Such a postponement can be particularly useful when a company wishes to avoid making an emergency decision. Rather than simply terminating the contract «on the safe side» without having yet examined the alternatives, it can thus have an additional period to conduct a competitive bidding in good conditions.

Finally, if none of these options are open and the contract must continue, the work done is not lost. The company can already identify the points for improvement, prepare the necessary information, and anticipate the next deadline sufficiently early.

Anticipate rather than endure the consequences

Well-prepared competition allows for a decision to be made based on objective elements: coverage, contractual conditions, franchise, services, claims management, and prices.

Are your insurance policies due for renewal soon? The right time to analyze them is usually before you receive the next renewal.