Risk & Business Magazine General Insurance Service - Page 29

HARD MARKET similar disasters are increasingly common and devastating . Years of costly disasters like these have compounded losses for insurers , driving up the cost of coverage overall , especially when it comes to commercial property policies .
• The economy as a whole affects an insurance company ’ s appetite for risk and ability to write new policies .
• Prolonged periods of inflation can make it challenging for insurance carriers to maintain coverage pricing and subsequently keep pace with more volatile loss trends . Unanticipated increases in loss expenses can result in higher incurred loss ratios for insurance carriers .
In addition to the above , the following are factors that may influence your insurance rates :
• The coverage you ’ re seeking — The forms of insurance you ’ re seeking , as well as the details of the coverage ( e . g ., limits of liability and value of insured property ) will affect your insurance pricing .
• The size of your business — As a general rule , the more employees your business has and the larger your revenue is , the more you will pay for your insurance .
• The industry in which you operate — Certain industries carry more risk than others . In general , businesses in these riskier sectors are more likely to file insurance claims . As a result , businesses involved in risky industries tend to , on average , pay more in insurance premiums .
• The location of your business — The location of your business will also influence your commercial insurance rates . If your business is located in an area prone to certain natural disasters , insurers may determine that your facility is more at risk for property damage . This increased risk will translate to higher insurance premiums .
• Your claims history — Your business ’ s claims history — often referred to as your loss history — will also have an impact on insurance rates . If your business has an extensive claims history , then insurance carriers will tend to consider your company more likely to file future claims . This , in turn , means that your business will be viewed as risky to insure , subjecting you to higher commercial insurance premiums .
• Your risk management practices — Now more than ever , conducting a careful assessment of your business ’ s unique exposures and establishing effective , well-documented risk management practices can make your establishment more attractive to insurance carriers . After all , having a robust risk management program in place reduces the likelihood of costly claims occurring as well as minimizes the potential losses that your business could experience from an unexpected event .
During a hard market , insurance buyers may face complex considerations regarding their insurance coverage . Thankfully , businesses are not without recourse in the face of a hard market .
BUSINESS OWNERS WHO COMMUNICATE FREQUENTLY WITH THEIR INSURANCE ADVISORS TO PROACTIVELY ADDRESS RISK LOSSES AND MANAGE EXPOSURES WILL BE BETTER PREPARED FOR A HARDENING MARKET THAN THOSE WHO DO NOT .
To successfully navigate the insurance market , you need an insurance professional who understands your business , helps you plan for unique risks , and advocates on your behalf . Secondly , you need insurance professionals who can tell your story to insurance carriers in a way that will best position your business come renewal time . Third , you need to work with an insurance professional who understands the dynamics of the current insurance market cycle and how to navigate a hard market successfully . Lastly , you need an insurance professional who fully understands your industry , the dynamic insurance landscape , and how to provide targeted loss control solutions .
Remember , in these challenging times , General Insurance Services is here to provide the insurance guidance and expertise your business needs . Contact your Business Risk Advisor today to have a more detailed conversation about the Market Outlook for 2022 and how they can help you mitigate your risk . +
BY : NICOLE GARZA , AINS , CLCS BUSINESS RISK ADVISOR , GENERAL INSURANCE SERVICES
Nicole was born and raised in Crown Point , Indiana graduating from Crown Point High School and earning a Bachelor ’ s Degree from Purdue University Northwest ’ s Hospitality and Tourism Management Program . She now resides in Hobart where she is a member of the Hobart Chamber of Commerce , Purdue Northwest Alumni Association Board , and the Merrillville Rotary Club . In her free time Nicole enjoys the beach , time spent with friends , and volunteering .
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