Are commercial insurance rates rising in 2021?
Unfortunately, commercial insurance rates are rising in 2021. Property/casualty insurance buyers have had to endure price hikes for more than a year in many cases and will more than likely have to deal with rate increases continuing into 2021.
The Alera Group, Inc. recently conducted a survey of insurers, wholesalers, and Alera’s agents and broker affiliates. The results of the survey projected an average rate increase across all types of commercial insurance of 11.6% in 2021, with increases ranging from a high of 17.5% for medical malpractice insurance to a low of 4.7% for workers comp.
With the exception of workers’ compensation, why are commercial rates on the rise? There are number of reasons for the rise including:
- Continued uncertainty from potential COVID-19 related cases
- Increasing natural disasters
- Higher than normal judgments
- Developing potential catastrophe losses
- Heightened property and casualty loss cost inflation
- Pressured investment yields
- Rising reinsurance costs
These and other factors are leading to insurers raising rates, lowering capacity, limiting or transferring risk, and taking a harder look at risk profiles..
Will your rates go up?
With commercial insurance rates increasing, should you be thinking about adjusting your coverage? In light of the fact that the majority of commercial insurance products, including commercial auto, business owners policy, general liability and commercial property, have all experienced positive rate hikes in 2020 and will continue to do so in 2021, you should take some time to review your current coverage and how much you currently pay for premiums.
If you feel like you’re paying too much in premiums, there are some things you can do to help lower your commercial insurance costs:
- Raise your deductible
- Combine your coverages
- Minimize risks by conducting a risk management review or initiating a safety training program
- Improve security precautions
- Pay your premium(s) upfront
- Purchase the amount of coverage that fits the needs of your business
It’s time to shop around
It’s a good idea to take some time at the beginning of each new year to evaluate your commercial insurance policies. As your business changes, so do your insurance requirements.
Perhaps, it’s time to take a look at rates from competing carriers.
As an independent insurance broker, Daniel Fraisse, business insurance broker in Los Angeles, focuses on fitting the policy to his clients’ needs and finances. Dan Fraisse has more than 30 years of experience working with many of the major insurance carriers. He is very knowledgeable about the various types of commercial insurance coverage as well as packaged policies.
One option for small to mid-sized businesses is a BOP or Business Owners Policy, a prepackaged policy that combines property, liability, and business interruption insurance. With a BOP, you have the option to add additional coverage options to “custom coverage” your policy.
Daniel Fraisse will evaluate the insurance needs of your business, provide you with a number of commercial insurance rate quotes, and advise you concerning the best options at the best price for your insurance needs.