Are You Prepared for The Hardening New York Business Insurance Market?

Maybe it hasn’t arrived yet. Maybe it’s already here. Or maybe we’re just seeing early signs of it. But nearly everyone in the business insurance industry agrees that a cyclical change back to a hard market is inevitable and perhaps underway.
Many New York and New Jersey business owners would say it’s already here, with rising business insurance rates and tightening terms, especially for workers’ compensation. In fact, according to recent surveys by the Council of Insurance Agents & Brokers, commercial insurance pricing nationwide went from an average 2.9 percent decrease in the first quarter of 2011 to an average 4.4 percent increase in the first quarter of 2012.
So what can business owners do to weather this hardening business insurance market?
First and foremost, proactively address your business risks through sound risk prevention strategies and practices. Fail to do that, and you’re going to feel the hard market’s squeeze worse than others. Insurance companies will naturally reward only the safest and most proactive businesses with desirable pricing and terms. Beefing up your risk management practices will put you in a more favorable position to negotiate your business insurance coverage and rates in this hardening market. In short, the better you manage your own risks, the better risk you are for your insurance company.
There are also other proactive measures you can take to control your business insurance expenses …

• Enhance coverage while rates are still low.
• Explore the potential for multi-year policies.
• Invest in business improvements – i.e. overhead sprinklers – that would make your property risk more desirable.
• Invest in workplace safety with personal protective equipment and or employee communication to contain workers’ compensation insurance costs.
• Educate yourself about insurance pricing, and analyze your own loss trends to see how they have historically affected your insurance premiums.
• Organize your paperwork now so you can quickly provide required documentation for business insurance price quotes.
• Evaluate your insurance broker’s performance and shop for a more proactive partner if necessary.
• Get all employees involved in creating a safe workplace environment.
• Control subcontracting exposures by requiring Certificates of Insurance and other risk transferring documentation.

There are plenty of factors outside your control in a hardening business insurance market, like increasing medical and pharmacy costs and increasing litigation trends. However, it’s no longer acceptable to be complacent like you could during a softer market. The new reality requires preemptive risk prevention strategies. New York and New Jersey businesses with proactive workplace safety and risk management practices will be poised to weather the hardening market and pull ahead of their competitors.