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The Hard Market: What Can You Do?

In a previous post we covered the factors leading to the current ‘hard market’ in the insurance industry (read it here). Essentially, this year has seen an overall tightening of the market, with premiums going up and insurers less willing to take on new risks.

The factors resulting in the current state of affairs are far larger than any individual business or brokerage, but there are steps you can take to minimize the impact on your costs and coverage. Here are some suggestions:

Review your current coverage. What’s changed since your current policy was first written? Are there new exposures you haven’t addressed, or are you covering exposures that no longer exist? Any game plan begins with a current snapshot of your risk management needs.

Make it a team effort. Review existing exposures, as well as company policies and procedures, with your risk advisor. He or she can offer informed advice to make your risk profile more attractive to underwriters. To that end …

Partner with the right broker. A hard market like this one makes it more vital than ever that you’re getting good advice. Make sure you’re partnered with a risk advisor who has a thorough understanding of not only your business, but your industry as a whole.

Know your losses. This is an important time to be on intimate terms with your loss history. You should understand not just how many losses you’ve had, but why they happened and what’s been done to prevent similar incidents in the future. Be prepared to explain all of that to insurers.

Budget and plan. Even businesses that do all of the above and present the best possible profile to insurers are likely to see premium increases at renewal time. Such is the nature of a hard market. Be sure to factor that into your budgeting for 2021.

While you may not be able to completely prevent premium increases, you can minimize the impact by demonstrating to insurers that you’re taking all possible steps to mitigate risk. Work with your broker to determine exactly what those steps are.

Questions about navigating a hard insurance market? Contact Consolidated Insurance.

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