According to Matthew Lerner, https:// www.businessinsurance.com, property and casualty lines of insurance are seeing rate increases from 5% to 30% depending on loss history. In addition, there is tighter underwriter scrutiny and programs that were previously available cease to exist.
American International Group (AIG) found its adjusted net income more than halved in the second quarter, reflecting a significant increase in coronavirus-related losses. “With respect to rate, the current environment is the strongest I’ve seen in more than 20 years and the increases over the last several quarters accelerating due to COVID-19”, said Brian Duperreault, CEO of AIG.
The Insurance Journal reported there have been 50,592 COVID-19 claims including 282 deaths so far. This information is based on figures from the California Workers Compensation Institute.
So Where Does This Leave You As A Business Owner?
I have spoken to several business owners who question the need to continue purchasing coverage. “They never pay anything so why bother?” Cancelling your policies can cause more problems than it will help. First, cancelling your policy can lead to being subjected to a minimum premium or a short rate cancellation. Many insurance companies charge a higher rate if the policy is cancelled midterm. If you cancel your existing coverage, the new coverage will definitely cost you more. With the insurance marketplace tightening, the companies do not look kindly on someone who does not have coverage.
If you have long term contracts with hotels or other business entities, no insurance can place those contracts in danger of being cancelled, This could also include your lease. Things seem to be picking up now so you want to be ready as your business grows.
Heffernan Insurance Brokers offered some suggestions to start preparing for the changing insurance market conditions:
• Review open claims and reserves and work with your broker/agent to close as many claims as possible well before your renewal
• Make sure your open claims aren’t over-reserved
• Review and update your employee handbook, loss prevention procedures and protocols
• Revive your focus on safety, starting with hiring and employee orientation.
• Don’t wait until the last minute!
If you plan on shopping for new insurance, you MUST start early. Depending on the size of your business, at least 30 days is necessary in these times. The days of calling a broker/agent and getting coverage the same day may be over.
You cannot ignore the COVID-19 requirements the CDC has issued for businesses. If you are unsure that you are in compliance, go to www.cdc.gov and review the requirements. OSHA wants you to take these regulations seriously. It appears they have issued fines over $3 million in relation to COVID-19. OSHA also has a web site you need to review: www.osha.gov/SLTC/covid-19/standards.html. There is a wealth of information to be found here. I want you to avoid being fined.
We must stay positive for 2021. Keep a smile on your face and keep walking forward
