Like most businesses, insurance companies have tried hard to keep costs in line with current rates. However, over the last year, the insurance industry has seen a rise in costs and this has costs losses to its expected profits. As a result, the industry is not generating the returns they would like so most insurance companies are seeking rate increases of 5% to 10% or more for some lines. However, the insurance market has a significant amount of surplus or available capital, which drives competition. While companies would like to raise prices, this competition serves as a moderating factor.

So, what can insurance buyers expect in 2023? Assuming similar exposures (payroll, property values and revenues) and a decent loss history, buyers should conservatively budget for a rate increase – the value largely dependent on the type of business one operates. The following is what you can expect for certain lines:

Certain properties are seeing significant increases, however. Anything remotely exposed to wildfire and flooding risk will see massive rate hikes. This affects both personal and commercial lines. Properties with wind-driven exposures are also difficult to insure. Expect flood premiums to go up significantly. Note that the replacement value of most properties has increased significantly due to inflation, so do not be surprised if your insurer insists on higher replacement cost values.

This line of insurance is experiencing modest increases. However, like all lines, this can vary. Some commercial construction and life science risks may see decreases, while certain habitational and hospitality businesses have seen double digit increases.

This line of insurance includes directors and officers (D&O) liability, employment practices and crime coverages. In the US, the market remains competitive with 5% to 10% average rate increases expected. The exception is public D&O, which is seeing flat renewals and, in some cases, rate decreases of 10% or more.

For years, this coverage was underpriced, but now rates are going up and underwriting requirements are strict. Cyber insurance is volatile and the number of new players entering the market make it difficult to provide a general idea of what insurance buyers might expect on renewal. Based on recent experience, cyber insurance costs will likely go up substantially now that is a much sought after line of coverage for most business owners.

This line of insurance is for your typical accountant, lawyer, architect or engineer remains in fairly good shape. There are a number of insurers competing for business and experience has been decent, but not great. Many insurers are seeking increases of 10% or more, but as mentioned above, competition is helping to soften this and most accounts are renewing with minimal rate increases.

Every business has different exposures, business practices and loss histories, all of which will affect your insurance costs. Firms that invest in loss prevention, proactive HR practices and aggressive claims management are generally looked upon more favorably by the underwriting community. The importance of risk management in controlling insurance costs cannot and should not be overlooked. In the end, while some conclusions can be made based on a macro view of the insurance industry, the best way to budget appropriately for 2023 is to have a discussion with your insurance broker.

As noted by USA Today, a fire broke out in the butter storage room of a dairy plant in Portage, Wisconsin, on January 2^nd, spreading melted butter throughout the facility and into a nearby historic canal. Crews responding to the buttery incident at the Associated Milk Producers plant deployed the same materials used in oil spills to clean up the mess.

“The spilled butter clogged storm drains and the Portage Canal, a historic waterway, with butter floating on top of the water in a 30-by-20-foot area, local officials said. No one was injured in the incident, and a hazmat team used boom absorbents used to control oil spills to clean up about 20 gallons of butter from the canal. The environmental impact from this incident has been minimal, so far, the Wisconsin Department of Natural Resources said in a statement, but officials say butter spills can have negative effects.

“They liken the impact of the butter to petroleum products,” said Karim Jaroudi, Manager, Environmental, Burns & Wilcox in Ontario. “The odor is considered a pollution event, and there could be damage to plants and animals. Anything that enters the environment that is not indigenous to it is going to be considered a pollutant and has to be remediated. When a contaminant enters a waterway, that is an even-worse-case scenario.”

While the spill was 99% contained on site, it is the sort of accident that on a larger scale could lead to thousands or even millions of dollars in loss for the company responsible, said Timothy Donnellon, Senior Broker, Environmental, Burns & Wilcox, Charleston, South Carolina. Many food companies fail to purchase Pollution Legal Liability Insurance as they may not deem their products as pollutants but if insurance coverage or this kind was covered, it would pay for these costs versus the company absorbing them.

Even if a food producer is not producing something that is deemed as a “pollutant”, many of their products may have by-products that if leaked into water systems, can be very hazardous. As a result, it is important that when obtaining commercial insurance, companies consult with a skilled and educated insurance broker. A broker with this knowledge would provide guidance on areas of this kind to ensure that the company is properly covered or at least notified of the importance of this coverage before they finalize their policy.

For a business owner, it is so important to develop a relationship with an insurance broker that has experience and knowledge so they can bring that to the table when you are finalizing your policy. This makes all the difference in the world. We always hope that you never have to file a claim, but at least if you do, we want to ensure you are covered for any incidents if they do come about.

At Leaders Insurance, we have a team of skilled brokers in the commercial area. If this story makes you wonder what your policy includes, we welcome your call so we can review your existing policy and ensure you have pollution liability coverage. Don’t be left without the coverage you need, when you need it most. We take the time to understand your needs and can help you as you find what is right for you. We look forward to assisting you with all of your insurance goals and requirements. Contact Us today.

Property Insurance, as the name states, refers to the coverage that protects your business property, such as the building itself, as well as other assets, such as inventory, electronics and equipment from damage related to fire or flooding, etc. This type of insurance can be suitable for a variety of businesses and definitely a major consideration for small business owners.

Liability Insurance differs from the first type of coverage, as it protects you from situations where your business may be found liable for causing damage or injury to third parties. For example, if an individual is injured on your premises or your property causes damages to the property of others, you could be found responsible.

In the even you are subject to a lawsuit related to these circumstances, this insurance helps cover costs associated with these related fees – fees which could have the ability to derail your company’s livelihood. For this reason, this coverage type is also worth obtaining as the owner of a small business.

Additionally, if your small business employs one or more staff members, it may also be necessary to add worker’s compensation coverage to your commercial insurance policy. Should one of your employees become injured as a result of the work they do for you, they may also have grounds to file a lawsuit against your business.

Since negligence lawsuits can have the means to have sizeable financial implications for small companies, it is also important to have adequate insurance in place to coverage these types of situations, if applicable to your business.

Perhaps a little newer, compared to other business insurance areas, this specialized insurance coverage helps protect your online or e-commerce interests. If a part of your small business operates using online channels to sell products or provide services, for example, then having this type of insurance will also be great beneficial.

As many businesses also operate using online platforms, then having coverages designed to safeguard your online usage, such as data and personal information is also critical to ensure you are minimizing any potential cyber security risks.

Property Insurance is a key aspect of a commercial policy. This type of insurance can cover a broad range of areas, including various potential damages to your property. In the event, there is damage done to your physical business assets, exterior property fixtures, this coverage can help with repair and replacements costs.

Damages or losses that occur as a result of fire, flooding, storms, vandalism and thefts are circumstance that are commonly covered under these plans.

Specific property items that are typically covered under the insurance policy will include, computers and other business equipment and documents, furniture and inventory, other’s property, indoor and outdoor signage, and the building premise, itself.

In the event, you may have to shut down all or partial areas of your business, having Business Interruption Insurance can be greatly beneficial as it can help you to continue to pay your bills, while also meeting payroll needs.

While properly insurance is a main type of insurance coverage you will want to include in your policy, there are other areas of coverage also worth some additional consideration and these typically fall under the scope of extended coverage.

Professional Liability insurance can support any legal fees you may be subject to as a result of being found at fault for any professional services you have supplied. For example, this may include instances of customers claims that the work or services did not fulfil contractual agreements.

Also relating to customer claims, however in this case specific to the products and services themselves being faulty or problematic, this Product Liability coverage can protect you by also reimbursing expenses associated with your legal defence needs.

Regardless of the size of your business, having cyber insurance in place is an important way of protecting your business against a range of cyber-attacks and the financial costs that can occur as a result. Some of these threats include, loss of income from online sales disruption, data loss, as well as damages affecting business reputation and legal defence expenses.

The unwanted presence of ransom-ware attacks have been on the rise and companies are being threatened with issues that can range from frozen internal systems, stolen software and data breaches – often coming at a high financial cost.

In order to help protect these cyber weaknesses, you can to turn to products that can ensure a stronger perimeter around your networks. Cyber Security products such as SASE (secure access service edge) and XDR (extended detection and response) to mention a few are designed to support these purposes and can also be used in remote working environments.

Other major cyber-attacks that have escalated this past year, is malware and phishing scams. While these are not new occurrences, cyber thieves has definitely seemed to have expanded their scope, as they continue to look to steal confidential data through various means. These include email and social media accounts, and text messaging systems, where a link is attached, and if accessed, information and internal systems can become compromised.

That being said, text message or SMS-related phishing scams, knowns as ‘smishing’, have been more common place lately as well, and while email systems may already filter out these as spam, text messaging platforms do not typically have the same initial protections in place. With more employees working remotely, the use of cell phones and text messaging has also become a more common form of communication and as a result, can be more easily accessed by employees and businesses unknowingly.

In addition to increased employee diligence, such as not opening links from individuals or organizations you do not recognize, businesses can also protect themselves by implementing anti-virus software that requires URL/domain authentication.

The bottom line really is, that by being proactive and having these important cyber security measures in place, you will stand a better chance of being able to fend off the damaging effects of cyber attacks. Looking into the types of products and services that will be best for you is an important step in the right direction.

Furthermore, you can also elevate your own level of protection by having the right cyber insurance for your needs.

With a high volume of cyber claims typically ranging from hacking, phishing and ransomware threats, it is even more critical that you factor in this type of insurance into the management your business, whether you are working remotely or in person.

At Leaders Insurance, we want to help you protect your business. Contact us to find out more about the insurance policies we offer and how you can continue to stay on top of cyber security in 2021.

While you may already have some insurance in place, such as commercial property insurance, commercial auto insurance or home-based business insurance, these types of policies , however will not necessarily help to protect your business from any legal concerns you may be faced with.

Since there are various types of liability scenarios you may encounter, there are in turn, specific types of liability insurance packages to help support your ongoing business needs.

This first type of insurance is a key liability insurance staple for any small business owner to carry. Commercial General Liability insurance protects small businesses from incidents where customers, suppliers or other individuals experience bodily injuries as a result of engaging with your business.

Additionally, CGL can also help in instances where an employee is found responsible for inflicting damage on property belonging to a third party. Ultimately, having this type of insurance in place is highly recommended for a wide range of small business owners.

As the name states, Product Liability Insurance can help small businesses deal with the high costs associated with any property damage or bodily harm that can occur as a result of the products that their business is manufacturing and/or selling.

If this type of service reflects your daily business operations, then this is a strong indication that you will benefit from having this type of insurance coverage.

This final type of liability insurance coverage exists to protect businesses from lawsuits that could be filed against them, in the event a client encounters a financial loss as a result of any actions that are deemed wrongful on the part of the business owner.

Lawsuit claims can range from clients experiencing a deficit in income due to contractual project deadlines are not fulfilled or when a business does not meet the previously agreed upon project or service expectations and financial losses occur. When small business owners find themselves in this type of situation, this means that they could suffer huge financial losses of their own.

If you are running a business that offers services or products for a fee, then Professional Liability coverage will definitely be worth an extra consideration and help protect you from these types of outcomes.

In the end, choosing the best liability insurance coverage really does depend on the nature of your small business and the services and products you are providing.

That said, if you are currently undecided about which type of liability insurance you need, Commercial General Liability insurance can serve a wide range of small business needs, and is a great place to start.

As a small business owner, you can then discuss your needs with an insurance agent and they can help you to identify which coverage will align the most accurately with your specific business interests.

Contact Leaders Insurance for more information on small business liability insurance coverage and let us help to ensure you are fully protected in all essential areas of your business.

If you have recently purchased some new equipment to operate your business, then it might be a good time to consider moving to commercial insurance. If, for example, you rely on expensive items, these can range from computers to vehicles, as well as many others, then you will want to ensure your insurance adequately covers these costs, should you need to promptly replace them in order to keep your business up and running.

Another important part to this, could also be that you have expanded your range of products and services  With a larger inventory than you previously had, additional commercial insurance is likely necessary to ensure you also have enough coverage to replace these items, in the event there are any major losses.

With equipment and vehicle insurance being key elements of operating your business, having this type of commercial insurance in place may be the right move for you at this time.

As a small business owner, you may have started out as being the only employee. That said, the time may have come that you now require some additional help and are ready to take on another employee. Whether you are taking on a second employee or increasing your number of employees more significantly, either way, this is an important sign that you should reevaluate your insurance.

For example, worker’s compensation insurance is a commercial insurance option that helps to ensure you have enough coverage to support all of your employees and that you are both protected.

Perhaps you have also experienced an increase in revenue and your business is growing in this area as well. If you are now making a substantially larger amount of money compared to when your business began, then this is also a strong indication that you will want to make an insurance adjustment.

With increased equipment and employee needs, your revenue may also be on the rise and you will want to seek out the best level of insurance coverage that matches the trajectory and evolution of your business.

One additional sign that also deserves mention, is whether you have made any changes to your business space. If you have or are thinking about renovating or moving into a larger work space, perhaps even leasing or buying a property, then you will also want to contact your agent. This can be a valuable opportunity to discuss the necessary commercial insurance coverage needed for this type of expansion.

Commercial insurance can cover a variety of unique areas pertaining to small businesses. Therefore, it is important to be aware of these aspects, so that you have the peace of mind that you are fully covered.