Dark storm clouds on horizon

Despite business owners being more worried about severe weather than ever before, over a quarter have decided to cut their insurance protections, according to a recent Nationwide survey.

Twenty-seven percent of business owners knowingly carry inadequate coverage, the data showed, while 42% say they would cut coverage to lower premiums. At the same time, 67% of property stakeholders expressed concern about the rise in extreme weather events. In wildfire and hurricane zones, concern jumps to 93% and 86% respectively.

“As severe weather becomes more unpredictable and widespread, having the right insurance coverage without a sound risk management plan is like building a structure on an unstable foundation,” Mark McGhiey told PropertyCasualty360.com, risk management and client services leader at Nationwide. “Businesses that don’t take both seriously may find it harder to recover - or reopen - after the next major storm.”

Other key takeaways…

  • Seventy-six percent of business owners are actively seeking opportunities to cut costs on their insurance policies and 42% say they’re willing to reduce insurance coverage to shrink premiums.
  • Only 34% of agents prioritize sharing carrier-provided risk management resources for their clients related to weather preparation. Another 33% only do so when asked by their customers.
  • Only 31% report willingness to invest in measures that improve their properties’ resilience to weather events, a 22-point drop from 2023.
  • Those who are willing to improve their properties are open to paying up to $10,000 to do so, down 50% from 2023.

"Protection against severe weather requires more than just insurance policies; it demands a robust business continuity plan,” said McGhiey.

“Without a comprehensive approach that includes both, business owners will be stuck in an endless cycle of financial strain and disruption as weather becomes more dangerous and unpredictable across the US, not just on the coasts,” he added. “It's imperative that property owners, agents and carriers work together to bridge these protection gaps and ensure resilience against future climate risks."

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