The world is constantly changing. This update should help you make better decisions in the year 2022 or help you be ready for changes coming up in insurance that might affect you.
What is Happening with Commercial Insurance Rates?
Commercial Property Insurance
For Commercial Insurance Rates on property, we are seeing lots of increases in premiums. With more natural disasters including Wildfire, Hurricanes, Tornados and Floods the insurance industry has seen billions of dollars in claims over the last few years.
Insurance companies purchase insurance from companies called Re-Insurers. In the past, your insurance company did not have to file a claim with their re-insurance companies, but in the last three years reinsurance companies have seen an increase in claims as large claims from property damage increased in cost and scale throughout the US. Now those reinsures are refusing to insure your insurance company if they are insuring risky property locations.
This puts your insurance company in a bad spot, they have to either increase their rates to self-insure without the help of reinsurance or no longer cover your business property if it is located in area that is deemed to be in a Fire, Hurricane, Tornado, or Flood zone. Buildings in more rural areas are already taking a hit on premium increases upon renewal. With most rates increasing 10% – 40%, or some insurance companies refusing to cover a property altogether.
We did see commercial insurance rates increase for auto insurance 3-4 years ago. At this point most of our carriers are staying stable on their insurance renewals and we have not seen large price increases in this area. As always, your drivers age, and past driving history can make a difference in risk and cost as well as vehicle age and storage location of your fleet.
Commercial Liability Insurance
Prices staying stable you may see a small 3% – 4% increase.
Everyone has seen how Cyber Security can make a big difference in organizations across the U.S. the last two years. With Oil pipelines coming to a halt to school & hospitals coming to a stop until ransoms are paid to release sensitive or important information. With more workers working from home and having company data primarily on individual laptops, we have made it easier than ever for hackers to hold your data for ransom.
Due to our connected world and a quadrupling of claims Cyber Insurance has become more expensive and comes with more cavoites. Policies are now including verbiage on minimal cyber security actions you will need to take before coverage is triggered, such as two factor authorization on all logins. Some policies have Cyber insurance included in a package; so it might be time to look at the amount of coverage you currently have an increase the maximum of ransom pay out as new ransom payouts have increased from thousands of dollars to millions of dollars.
Depending on the state you live in or industry you are a part of your workers compensations rates could be affected going into 2022. In Oregon, we are not seeing large increases across the board. However, if you are in an industry where it is historically hard to insure you may see some increase an example of those industries are roofing contractors or arborist.
Excess Liability or Umbrella Insurance
An increase in commercial insurance claims means an increase in premiums. Check your GL limits and your excess limits. Claims are costing more money so it might be time to increase your insurance limits too.
Is your business insured properly?
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Employment Practices Liability Insurance
Look to see an increase in prices as employee related lawsuits on employers has increased. With mixed messaging on OSHA COVID protocols, Me Too movement, and strong polarizing political landscape, we are expecting more of these type of claims in the future.
Group Health Insurance
Right now, prices are staying stable for group health insurance.
As the federal government pulls away from reimbursement for all COVID related charges I predict insures will reestablish regular co-pay or co-insurance structure for COVID testing and care management. This could also raise prices, but I don’t see that happening for a few more years.
In general, the most expensive piece of group health insurance is prescription medication. If changes are made to price negotiations with pharmaceutical companies, we could see an increase or decrease in cost.
Wrapping it up
Commercial Insurance Rates for Property, Cyber, Employment Practices, and Excess Liability Insurance are seeing an increase in premium cost. Other price increases should be minimal around 3% – 4%. Knowing ahead of time gives you a chance to shop your coverage with a competitive insurance agent, try an independent Insurance agent who has access to 100-1000 of markets just like Bancorp Insurance.
Start shopping 90 days before renewals as even our industry is having a shortage of staff, which can affect the amount of time it will take to get a quote back.
Don’t wait call Bancorp to set up your account review today – 800-452-6828
Bancorp’s insurance experts are available to provide you with a free review and consultation. Contact Us – Bancorp Insurance Call 800-452-6826
Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consultation with our agents. These predictions are based on observations within our agency and markets. Trends may not be relative or affect your particular business. We cannot be held accountable for any particular changes in the industry or from our carriers.