Increasing Premiums? Here’s How to Stay Ahead in the Changing Insurance Market

In today’s ever-changing business landscape one of the ascending challenges many business owners are facing is the rise in commercial insurance premiums. Between increased claims frequency and cost, rising labor and material costs, and stricter regulatory environments business owners are seeing their premiums climb year over year at significant levels—often without a clear understanding of why this is happening.

While rising premiums might seem inevitable at this point, the good news is that with the right approach to the insurance marketplace, there are strategies to minimize increases and ensure you’re getting the most out of your insurance program. As an Commercial Insurance Broker, I’ve worked with hundreds of businesses across many industries helping them navigate these uncertain times by negotiating the best terms, creating leverage in the marketplace and utilizing strategies to manage risk. Here are a few ways you can stay ahead of the game and protect your bottom line:

1. Hiring a Broker to Create Leverage in the Market to Negotiate Competitive Pricing

One of the most effective tools businesses have at their disposal is partnering with a strategic insurance broker that can give you back leverage in your insurance buying experience. A broker works for you, not the insurance companies, giving you access to multiple insurance companies and the ability for you to have a full view of the market without wondering if you are getting the best bang for your buck. More importantly, the right broker knows the intricacies of the market and can negotiate better pricing by creating competition and demand for your policies between insurance companies. Having a strategy for a multi year process to control rates is key rather than just going out to "get quotes every year" with your broker or "keeping your broker honest" by having other brokers spray the marketplace with submissions to all the different insurance companies ultimately hurting your business's name with underwriters which could be costing you money in the long run.

Solution for Business Owners: Engage your broker early in the renewal process and discuss what their strategy is to protect your business's name in the market and to create demand with underwriters for your business. Don’t wait until the last minute—being on the same page and giving your broker time to create leverage around your program with the current insurance company in place as as well as their competitor companies allows negotiation to ensures you’re not stuck with the first renewal offer that comes in.

2. Conduct a Coverage Review and Ensure Your Policies Reflect the Your Current Risks

As businesses evolve, so do their risks. Industry trends, scaling back, or expanding operations can lead to new exposures or reduced risks. Conducting an annual review with your broker can help identify these changes. For example, if a business is rapidly growing and adding new employees, opening additional locations, or expanding into new markets; the exposure to employment-related claims such as discrimination, wrongful termination, or harassment may need to be discussed further than in previous years to ensure your protections again new risks.

Solution for Business Owners: Collaborate with your broker to align your coverage with current operations and discuss your long term business plans of where you see your business growing or reducing exposures to update your long term insurance buying strategy. This might involve increasing limits, looking at add-ons for evolving risks, or opting to approach the marketplace to find a better fit for your growing or reducing exposures in the coming years.

?

3. Invest in Risk Management to Reduce Your Exposure

Insurance companies reward businesses that take proactive steps in risk management. Implementing strong practices—like improving workplace safety, investing in robust cybersecurity measures, or upgrading physical security systems—can significantly lower your exposure to risks. Not only does this reduce the likelihood of filing claims, but it also is demonstrating a commitment to mitigating risks which gives YOU leverage in negotiations for your broker with the marketplace on why companies should put their best terms forward to win your business.

Solution for Business Owners: Implement strong risk management practices tailored to your industry. Your broker can help you identify areas where improvements can be made, such as providing safety training for employees or upgrading physical security measures. These initiatives demonstrate to insurance companies that your business is a lower risk than the rest of your business segment, which can directly impact your premiums.

?

4. Stay Informed About Regulatory Changes in Your Industry or State

The insurance landscape is constantly impacted by new regulations and laws. From industry-specific or state mandates to broader changes like data privacy or employment laws, staying informed about these developments is crucial. Regulatory shifts can affect your coverage requirements, claims processes, or the cost of your policies. Businesses that stay ahead of these changes can adjust their risk management strategies and policies proactively without being left without required coverages or paying more than they should for them.

Solution for Business Owners: Regularly consult with your broker to ensure your coverage is compliant with the latest regulations and tailored to meet any new requirements.

?

Final Thoughts: Staying Ahead in a Challenging Market

While rising premiums might feel like just another hurdle in today’s business environment for business owners, with the right strategy and a strategic broker by your side, you can implement ways to mitigate the impact. By having a strategy for your renewals to give you back leverage in the marketplace, having your risk profile updated to ensure you have the right coverages, investing in risk management to reduce exposures and staying informed on regulatory changes of your industry or state you can ensure your business is well-protected without paying more than you should be in today's changing commercial insurance market.

Thanks for taking the time to read the latest edition of The Broker’s Edge on Insurance!

I’m Trevor Elliott, a Commercial Insurance Broker with over a decade of experience working with business owners across various industries. My goal is to provide valuable insights to the insurance industry and strategies to help business owners navigate the world of insurance with confidence.

If you found this helpful, be sure to subscribe to this newsletter for regular updates on the latest trends, buying strategies, and essential coverage tips and LET'S CONNECT on LinkedIn!