There are many factors that can impact insurance premiums; many of which are caused by volatility within other industries. While businesses waited for supply to catch up to demand, other calamities didn’t wait — instead, they kept coming. Extreme weather events, international port delays, business and travel disruptions, worker shortages and inflation all added to the strain.

The result is what's known in the insurance industry as a hard market. What does that mean for you and your business?

A “hard market” means competition and high prices

In the wake of this strain on businesses, the industry is experiencing an unusually high number of claims, from property damage to liability lawsuits. This has caused the insurance business to enter into a hard market, meaning rates are rising and insurance companies are becoming more selective about what client liability they’ll accept.

As recent uncertainty has taught us all, the difference between a good safety net and a bad one can be the determining factor between a strong, resilient business and bankruptcy.

We're your secret weapon in a hard market

Bravera Insurance is an independent agency; this means we serve our clients' best interests, not the insurance company’s. Even in a hardening market, we will work with our carrier partners to find insurance that fits your needs and budget. We know which insurance companies have the appetite to take on your type of business.

It's important that we have enough time to market your business, as carriers are taking more time to review submissions in the hard market. We can help you find the right insurance carrier for your business that is both high quality and offers reliable policies at reasonable rates. Vying for the cheapest policy is tempting, but a cheaper policy can also mean more exclusions and less coverage.

Factors to consider

Inflation: Rising inflation means increasing insurance premiums in response to the economic climate (also complicated by a pandemic backlash). In addition to supply chain woes, the worker shortage continues as the cost of labor and materials skyrockets. Weather events rack up annual catastrophic losses putting reserves and reinsurers in a tight spot. The cost to repair or replace things is much higher, and premiums reflect that shift.

Supply Chain Shortages: Shipping container shortages, gridlock at international ports and outrageous shipping charges have created ripples in the downstream supply chain raising their costs and affecting insurance rates.

What types of insurance are affected?

The short answer is all types of insurance are being affected. But here are a few that might be affected:

• Commercial auto policies offer coverage specifically for commercial use autos. Shortages in the driver workforce along with more stringent commercial driver’s license requirements have only stoked costs, as insurance companies shy away from inexperienced drivers.
• Commercial property policies are one of the most important policies a business can add to their insurance portfolio. Often times, property is the most valuable asset a business has, and it is important to be sure quality coverage is in place to protect those assets.
• Business interruption (BI) insurance is an essential part of doing business if you suffer a loss and have to close your business for a while. Coverage helps replace the income lost after physical damage to your place of business (such as a fire) and during the restoration period.
• Excess Liability or Umbrella Liability insurance also extends insurance limits, with the notable difference being that it covers most of the active policies you have, not just one. It’s a smart move if you’re looking to add higher limits across several lines.
• Cyber liability insurance premiums are rising, but don’t overlook this important insurance. It’s critical for any business that relies on electronic communication and banking. Other things such as internet, email and website hosts can also be a source of exposure for your business. The number of data breaches has risen every year, and so has the cost to recover from a hack. Your Bravera Advisor can help you navigate through this complex area of insurance.

 Call your Bravera Advisor for a coverage review

If you have concerns about an upcoming insurance renewal or questions on your current coverage, be proactive and give us a call. We are here to help you understand your policy and coverage.