• Home
  • Get A Quote
  • Customer Service
  • Refer a Friend
  • About Us
  • Location Map
  • Employee Directory
  • Privacy Policy
  • Contact Us
 
CALL US AT 352.332.0180
Home
  • Home
  • Get A Quote
  • Customer Service
  • What We Offer
    • Auto Insurance
    • Business Insurance
    • Commercial Auto Insurance
    • Contractors Insurance
    • Home Insurance
    • Renters Insurance
    • Boat | Motorcycle | RV
  • Blog
  • Resources
    • Secure File Area
    • Refer a Friend
    • Important Links
    • Insurance Glossary
  • About Us
    • About Us
    • Location Map
    • Privacy Policy
  • Contact
    • Contact Us
    • Join Our Newsletter
Auto Insurance PERSONAL AUTO
Auto Insurance COMMERCIAL AUTO
Homeowners Insurance HOME
Business Insurance BUSINESS
Toy Insurance TOYS
Contractors Insurance CONTRACTORS
Home > Blog > Commercial Insurance Rates Continue Climbing
MONDAY, OCTOBER 19, 2020

Commercial Insurance Rates Continue Climbing

Commercial Insurance Rates Continue Climbing

Despite the ongoing COVID-19 pandemic, commercial insurance rates are continuing to move higher, pretty much across the board with the exception of workers' compensation.

A new report by online insurance exchange MarketScout found that in the third quarter of the year the highest rate increases were in liability lines, but hefty rises in property insurance were also noteworthy. Most of these rate hikes were occurring before the COVID-19 pandemic, but their magnitude increased recently.

"The composite rate is up 6.25% for the third quarter of 2020, as compared to up 4.8 percent in the second quarter. Rates began adjusting upward at a quicker pace in September," said Richard Kerr, CEO of MarketScout. "We expect the fourth quarter 2020 will reflect continued aggressive rate increases in property, D&O and umbrella/excess liability coverages."

Here's what MarkeScout found:

  • D&O rates increased 11.5%.
  • Umbrella and excess liability rates climbed 8.5%.
  • Commercial auto rates jumped 8%.
  • Professional liability rates increased 7.5%,
  • Commercial property rates rose 7%, and
  • Workers' compensation rates inched up 0.5%. 

 

Arthur J. Gallagher, in its own report, attributed commercial rate increases to:

  • A spike in large weather-related loss events and catastrophes, 
  • Historically low interest rates, 
  • Industry-wide rapid increases in liability losses, and 
  • The global pandemic and resulting economic uncertainty.

 

Below we'll look at what's driving rate increases in individual lines of insurance.

 

Directors & officers liability

One of the most stressed lines is D&O insurance, rates for which have been on a steady rise for a few years. In fact, increased litigation and hefty court judgments against the top brass at businesses around the country have resulted in substantial payouts by insurers.

Gallagher noted in its report that all of its clients are seeing increases in their D&O coverage, although publicly traded companies are witnessing far higher increases than privately held firms. But insurers are also pulling back and writing fewer policies, which in turn feeds into higher rates as the supply diminishes. Some insurers have stopped taking on any new D&O accounts.

 

General liability and umbrella

Rates for these coverages continue climbing due to a number of factors, including large judgments, the cost of litigation and a rising tide of lawsuits against businesses. Gallagher noted that the median verdict for the top 50 cases has doubled in the past four years.

Another factor that could affect future rates is the liability effects of the COVID-19 pandemic and if businesses will see a new groundswell of lawsuits for failing to adequately follow and communicate public health guidelines. As a result, some insurers have started including communicable disease exclusions in their liability policies.

In addition, insurance companies have scaled back on policy limits, according to Gallagher.

"Carriers are also restricting the amount of limit they are willing to put forth, or

repositioning their capacity at a higher level. For example, carriers that have

historically offered $25 million lead umbrella policies are now limiting their lead

positions to $10 million or less, in most cases," the company wrote.

 

Commercial auto

Rates continue rising in commercial auto, despite a drop in claims due to the pandemic. The increases in commercial auto premiums over the past few years have been down to an increase in distracted-driving accidents and deaths, escalating medical costs and climbing repair costs.

 

Property

Property insurance rate inflation is largely due to the increasing number of natural catastrophes occurring throughout the country. Hurricane activity and intensity continue to grow, as does the frequency and destruction of wildfires, tornados and flooding. 

In response, commercial property insurers have been making changes to coverage terms and conditions, increasing deductibles and shrinking policy limits. These moves have been especially pronounced in areas with higher exposure to natural catastrophes.

 

The takeaway

With markets hardening, now is a good time to double down on your risk management efforts to reduce your exposure however you can. Depending on the insurance those efforts will take different forms, such as better protecting your properties against catastrophes or training your driving employees regularly in road safety.

Thank you for visiting the Partners Insurance Agency blog. We hope you found our content helpful and informative.

Posted 12:00 PM

Tags: commercial insurance rates, business insurance rates
Share |


No Comments


Post a Comment
Required
Required (Not Displayed)
Required


All comments are moderated and stripped of HTML.

NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2021
  • 2020
  • 2019
  • 2018
  • 2017
  • 2016

  • insurance(99)
  • homeowners insurance(44)
  • auto insurance(40)
  • business insurance(29)
  • home insurance(11)
  • boat insurance(8)
  • workers compensation(8)
  • insurance claims(8)
  • liability insurance(7)
  • flood insurance(6)
  • liability(5)
  • additional insured(5)
  • commercial liability insurance(4)
  • d&o insurance(4)
  • umbrella insurance(4)
  • hurricane preparedness(4)
  • commercial auto insurance(4)
  • renters insurance(4)
  • insurance discounts(4)
  • teen drivers(3)
  • vacation rental insurance(3)
  • business owners policy(3)
  • tria(3)
  • small business insurance(3)
  • insurance coverage(3)
  • water damage(3)
  • summer safety(3)
  • workplace safety(3)
  • commercial insurance(3)
  • commerical insurance(3)
  • covid-19(3)
  • uber(2)
  • non-owned auto insurance(2)
  • drunk driving(2)
  • employee fraud(2)
  • terrorism risk insurance(2)
  • business owners insurance(2)
  • insurance liability(2)
  • freezing pipes(2)
  • halloween safety(2)
  • auto accident scams(2)
  • holiday safety(2)
  • natural disasters(2)
  • contractors(2)
  • moving(2)
  • dog liability insurance(2)
  • forced-placed insurance(2)
  • claims process(2)
  • buisiness insurance(2)
  • general liability(2)

View Mobile Version
Facebook
Twitter
LinkedIn
Carriers
logo, company name
text, logo
Carriers
logo
icon
logo, company name
PIA

Resources

Home About Us Get a Quote Customer Service Contact Us

Contact Us

icon
  • 4040 W Newberry Road Suite 950
  • Gainesville, FL 32607
  • Office: 352.332.0180
  • Fax: 352.378.5820
© Copyright. All rights reserved.
Powered by Insurance Website Builder