Business Insurance in New York isn’t always easy. And today it’s becoming more challenging. Rates are increasing for some classes of business. Underwriting rules are becoming more stringent, and more changes seem to be coming.
Having been through several market changes, I can tell that this is the beginning of a hard market. A “hard market” is one where rates increase and availability of coverage decreases. I don’t believe we’re in a hard market yet for business insurance in New York. But we’re definitely in a firming marketplace.
What does this mean for the average business owner in New York?
It depends on the type of business you’re in and the size of your business.
Most small companies with account premiums under $20,000 a year will not see much of a change in their accounts. Unless they are in the construction / contracting industry or insure a lot of property. Construction accounts in New York continue to be challenging. We’re also seeing property rates increase as well. This will affect apartment building owners, office building owners and more.
What triggers the insurance marketplace to shift from very competitive rates to less competitive?
Market changes happen for a variety of reasons. Right now the shift appears to be the result of massive property claims not only in the U.S. but globally. Hurricanes, wildfires, and other weather-related events have crushed many insurers.
Liability lawsuits are also a problem area for insurers driving rates up. Not only are general liability lawsuits increasing, but so are auto liability claims. In fact, commercial auto claims are out of control. If you have a fleet of company vehicles, auto risk control should be high on your agenda.
The combination of these factors causes insurers to respond by increasing rates. Insurers also take a harder look at underwriting rules as well to control losses.
What should New York business owners and decision-makers do?
The best thing you should do is speak to your insurance broker EARLY. Like six months before your renewal. Ask them what they are seeing in the marketplace. Do they think there will be a large rate increase? Will there be any problems with getting a renewal offer?
I like to see these conversations from a strategic point of view. Working early and having an honest dialogue, without sugar-coating facts is in everyone’s best interest.
Does it make sense to go out to the market for quotes?
I’m not a big fan of sending your account out to the market for quotes. Commonly known as a market canvass or a shopping exercise this is not strategic. In fact, a shopping exercise can work against you if not performed correctly. Instead of having three or more brokers compete for your business, select one broker. That broker should have expertise and knowledge in your industry. Have the capabilities and resources to help you manage risk. And be the type of professional you want to work with.
That one broker is going to represent the insurance companies that will produce the best results for you. Also, that one broker can synthesize the various quotes into one proposal or comparison for you. Rely on that broker’s expertise to guide you to a renewal decision.
If you don’t think your broker is up to the challenge of a changing market, why not give me a call and see if we would be a good fit for you and your company.
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