Most companies in the glass industry would agree that rising insurance rates have been a nuisance. Commercial insurance is needed to protect businesses from liability. Glass companies have different insurance needs than restaurants or hardware stores. However, each industry is impacted when rates increase.
Unfortunately, the path ahead appears bumpy. The Mahoney Group reports in its 2023 Market Report and Forecast: Understanding the Trends Driving Rates in Commercial Insurance that several economic trends will affect the insurance marketplace this year.
These trends include increased inflation, a potential recession, geopolitical conflicts, regulatory scrutiny and litigation funding. Of course, many other factors impact rates, including the type of coverage, business size, location and history.
The report predicts increases in most lines of coverage. Commercial property catastrophe bond (CAT)-free coverage is expected to increase by 10% to 15% (CAT-exposed by 15% to 25%). General liability coverage is predicted to increase by 5% to 10%, while workers’ compensation coverage is forecasted to decrease by around 5% or jump by 5%.
Cyber liability is projected to see the most dramatic rise in costs. The line of coverage is predicted to increase anywhere from 25% to 100% in 2023. This is a result of increased cyber threats and attack sophistication.
“Moving into 2023, we anticipate that difficult market conditions will make for an increasingly volatile and unpredictable cyber insurance marketplace,” say officials from The Mahoney Group. “Policyholders who fail to adopt proper cybersecurity protocols or experience a rise in cyber losses should expect to face the steepest rate increases and strictest coverage limitations for the foreseeable future.”
There are several ways for companies to protect themselves, including:
- Beginning the renewal process early;
- Developing a documented business continuity plan to better prepare for interruptions;
- Educating yourself on key market changes and how to respond;
- Implementing safety and health programs to address common risks and conduct routine safety training;
- Ensuring accurate payroll projections;
- Taking advantage of loss control services offered by insurance carriers;
- Developing internet usage policies, remote work policies and personal device policies; and
- Being aware of nation-state threats and supply chain exposures.