Credit: Wasan/Adobe Stock
Optimism is high for small and mid-market businesses in 2026, but a growing concern over rising costs and workforce pressures has prompted many owners to re-evaluate how they manage risk, according to a report by Nationwide.
Higher costs and labor troubles have also raised the stakes for insurance agents and brokers to step in, the data showed, as strategic advisors and help clients balance cost control with long-term protection.
"Business owners are not pulling back from growth, but they are becoming more intentional about how they deploy capital and manage risk," Nationwide's SVP and Small Commercial leader, George Williams, told PropertyCasulty360.com. "In this environment, agents who lead with economic insight, industry expertise and proactive risk guidance —not just premium comparisons — will be the ones who strengthen relationships and help clients navigate both cost pressure and emerging exposures with confidence."
Meanwhile, the rising costs continue to pressure insurance decisions as most owners expect expenses to rise in 2026, including insurance costs.
According to Nationwide, 50% say clients have tried to renegotiate or switch carriers, while one-third report clients delaying policy purchases or canceling optional coverages.
Other key takeaways from Nationwide include:
Guarded optimism: Nearly 60% of small businesses and 76% of mid-market firms rate their business outlook as good or excellent – but significantly less view the broader U.S. economy positively.
Workforce risk: One in five business owners report increased mistakes among their workforce tied to heavier workloads – raising safety, liability and workers' comp exposure.
Insurance strain: Six in 10 owners expect insurance and operating costs to rise in 2026; nine in 10 independent agents report increased client pressure to cut premiums.
Alternative risk financing grows: Captives, self-insured healthcare and parametric solutions are gaining traction – especially among mid-market firms.
(Photo credit: Wasan/Adobe Stock)
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