When to update a business insurance policy

Slideshow July 29, 2024 at 11:00 PM

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Small to midsize business (SMB) insurance trends have become more unpredictable and challenging to navigate, despite the global economy just missing a recession in 2023, a recent Marsh McLennan Agency survey showed. Inflation and high interest rates linger amid continued supply-side pressures, creating uncertainty and threatening economic growth, according to the data. Insurance premiums also are up due to nuclear judgments and climate challenges placing additional financial strain and risk on businesses. The survey highlighted the following SMB risks for 2024:

Cyber and data;
Regulatory and workforce;
Catastrophic weather and property limit capacity; and
Nuclear verdicts and social inflation.

"Traditional risk models may not adequately capture the multifaceted risks posed by today's climate," Marsh McLennan Agency said in the survey. "Instead, insurers are adapting their strategies, products, and services to better support businesses against unforeseen disruptions to help them strive towards resilience. Businesses can expect this uncertainty and high-risk environment to continue in the short term." Meanwhile, 52% of leaders from the Marsh McLennan survey said tech advancements like AI, advanced imaging, data analytics, and automation will lead to new challenges for their business, while 93% said it would lead to new opportunities. At the same time, a recent Gartner survey showed 60% of organizations will use cybersecurity risk as a primary determinant when engaging in M&A activity by 2025. Between mid-November 2023 and April of this year, 145 insurance transactions worth over $34 billion were announced, compared to 318 transactions totaling $11.2 billion from the previous six month period. The slideshow above illustrates the times when a small or midsize businesses should update insurance coverages, according to Berry Insurance. See also: