Why Did Commercial Insurance Rates Spike in 2023?
Download MP3Episode Description:
In this episode, we break down how inflation is directly impacting commercial insurance rates, and what business owners should expect in the coming months. Here’s what you’ll learn:
- How inflation drives up repair, material, and labor costs—leading to higher insurance payouts
- Why insurance companies can't raise rates in anticipation of higher costs (due to legal restrictions)
- How delayed rate increases work: insurers must wait until claims are paid before increasing premiums
- Gallagher Insurance’s insights as one of the nation’s largest brokers
- Timeline of inflation’s impact on renewals and actuarial recalculations
- What commercial insurance clients should do to prepare:
- Budget for an estimated 15–20% premium increase
- Explore reductions or credits based on safety programs or coverage changes
- Consider functional vs. actual replacement cost options
- Increase deductibles or self-insure on the low end to lower premiums
- Raise stop-loss limits strategically
- Combine coverages with business owner or package policies
- Review exclusions and add endorsements where needed
- Why your current insurer might exit your market—and how to prepare for non-renewals
- The importance of having your loss runs ready when shopping for new carriers
- The rise of cyber liability and moral hazard factors contributing to increased claims
- What a hardening insurance market means for your business in the next 12–24 months
