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Commercial Insurance Rates Are Rising: What Small Businesses Need to Know

09.20.2019

This month in the Small Business Monthly “Financial Fitness” column, Karen Stern, Partner in Charge of the Brown Smith Wallace Entrepreneurial Services Group, discusses items to consider as you review your business insurance policies and upcoming renewals.

Average commercial insurance prices increased by 3 percent in the first quarter of 2019, according to the Global Market Insurance Index released in May by insurance broker Marsh LLC. As prices continue to rise, it’s important to ensure your insurance coverage is both comprehensive and cost effective. As a small business owner, minimizing business risk is key in order to be financially successful. Tailoring policies that fit your business’ needs and your budget don’t have to be mutually exclusive.

Here are some questions to consider when reviewing your business insurance policies:

  • Do you have what you need? Chances are you won’t need some of the coverage that larger businesses require. Review your policy and ensure that it provides the appropriate amount of coverage for your size and type of business.
  • Are you relying on “package policies?” Many insurance companies group their policies based on what they believe you need. These packages can be altered to specifically suit your company.
  • Can you reduce cost without reducing coverage? Some companies allow bundling different types of policies to give you a multiple policy discount without sacrificing coverage.
  • Is business interruption included in your policy? It is a separate section that needs to be added to the policy – it is not automatically included. You’ll also want to verify what “perils” are covered by your policy (earthquakes, floods, tornadoes, etc.)
  • Have you consulted an independent advisor? If you aren’t sure what type of coverage you need, or if you’re being talked into an unnecessary policy, consult an outside professional to review your policy and help you mold it to fit your business.

It’s important to look at your organization’s risks and strategically determine which policies you need. There is not one uniform approach that applies to every business, and you should enlist an advisor to help you think through your coverage needs.

For more information on how your business could benefit from an independent insurance review, contact Bill Goddard, Insurance Advisory Services Principal, at bgoddard@bswllc.com or 314.983.1253.

 

Team

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