Business readiness

Insurance Policy Register

What is an Insurance Policy Register?

A list identifying all of the insurance policies held by the company along with important information about each policy such as the identify of the insurance provide, cover type, policy limit, key exclusions, policy premium, and expiry date.

Having an effective approach to insuring your business is about more than just obtaining a few insurance policies. Managing insurance effectively requires the following:

  • Having a register of insurance policies that captures all key features including coverage, costs, renewal dates, inclusions, exclusions and size of cover
  • Having a process to regularly review the insurance coverage of the business to ensure it remains appropriate
  • Having a process to update insurance policies immediately after changes have occurred to the coverage base including asset revaluations, purchases or sales
  • Having all policy documentation readily available for review

Why is an Insurance Policy Register important for business today?

Effectively managing your insurance policies provides a number of benefits to any business including:

  • Ensuring that management are comfortable with the scope of the insurance cover in place having regard to the nature of the business, its risks and the availability and cost of insurance
  • Helping ensure that changes made to assets are reflected as soon as possible in the insurance coverage so that there is limited risk of under or over insurance
  • Assisting with insurance cost forecasting by providing a clear breakdown on costs
  • Having a single source of truth for the coverage, inclusions and exclusions that management can refer back to as the business evolves
  • Increasing the comfort level of banks and other financiers by reducing their risk exposure

Why is an Insurance Policy Register important for an event tomorrow?

Insurance coverage is an important topic in the due diligence process. Having a robust approach to insurance management provides the following benefits during a deal:

  • Reduced cost of assessment for investors and/or transaction costs. By having all of the key information on insurance available in one place along with regular assessments of the suitability of coverage, the additional work required by investors is reduced considerably.
  • Improved risk assessment by investors. By managing the usage of insurance more effectively, the overall risk assessment of the business is likely to be improved in the eyes of the investors.
  • Improved assessment of management performance. This is another area where the robust management of a topic will add to the overall assessment of management by bidders in a transaction.

Pros of addressing Insurance Policy Registers

  • Ensures insurance cover is appropriate
  • Ensures changes in assets are quickly reflected in coverage
  • Single source of truth of coverage information
  • Increases bank comfort level
  • Assists with insurance cost forecasting

Cons of not addressing this topic

  • Increased potential for over or under insuring key assets
  • Increased potential for key changes to assets not being reflected in insurance coverage for an extended period
  • Potentially reduced comfort level of banks and other financiers

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