Commercial Property Rates Are Expected to Rise: Are You Prepared?
According to Woodruff Sawyer & Co., a San Francisco-based brokerage firm, commercial property rates are forecasted to rise more than 30 percent for certain exposures, or potential insurance risks.
The biggest risk, according to the firm, is for accounts with catastrophe exposure that have shown little risk improvement and an unfavorable loss history. So, what does this mean for you?
Business owners understand that insurance coverage is essential to protect themselves (and their businesses) against potential risks or accidents. As with most things in life, that protection comes at a cost. And, based on the forecast of Woodruff Sawyer & Co., certain insurance policies may see an increase in price in 2023.
The firm also predicts that commercial general liability policies in casualty markets will see increases of two to seven percent, while commercial auto markets may see increases between five and eight percent. The expected increases for coverage such as umbrella and excess liability vary greatly depending on the size of the company insured. Larger businesses, categorized as companies with revenue in excess of $1 billion, may see rate increases between six and 15 percent, whereas middle-market and small businesses will see slightly lower increases, ranging from four to 10 percent.
The expected increases are due, in part, to the devastating effects of Hurricane Ian earlier this year. The impact of the natural disaster washed away any hopes for the stabilization of property rates or rate reduction.