New Jersey, USA – Eric Jesse, a partner in Lowenstein Sandler’s Insurance Recovery Group, provides insights into the current state of the property insurance market and offers three tips for companies to make their commercial properties more appealing to insurers.
Commercial property insurance is a vital coverage for businesses as it safeguards their buildings, structures, and the property and equipment within them. It also typically covers lost business income resulting from covered events. During the COVID-19 pandemic, the importance of this coverage became evident when businesses faced closures and restrictions.
The property insurance market is facing challenges due to billion-dollar natural disasters, supply chain issues, and inflation concerns. These events have resulted in significant losses and insurance payouts, leading to a hardening insurance market. As a result, insurers are increasing premiums, raising deductibles, lowering limits, and implementing more restrictive coverage grants and exclusions.
Despite the challenging market conditions, there are strategies that businesses can adopt to navigate these circumstances and become more attractive to insurers. Firstly, it is crucial to work with a knowledgeable broker and coverage counsel who can advocate for the company and understand the intricacies of the market. Proactivity is key – starting the renewal process early allows for better negotiation and more favorable terms.
Another important consideration is implementing robust risk management procedures. This includes ensuring that subcontractors have their own insurance and that the company is named as an additional insured. Insurers prefer companies with multiple potential sources of recovery in the event of a loss, as it spreads out their risk exposure.
Preparing for a more intensive underwriting process is also essential. Companies should be ready to address questions about their risk magnitude and have a current statement of values to demonstrate their preparedness. Additionally, having a clear understanding of the supply chain and a list of trusted vendors can streamline the underwriting process and showcase the company’s organizational capabilities.
In conclusion, Eric Jesse emphasizes the importance of understanding the current state of the property insurance market and taking proactive steps to mitigate its impact on businesses. By working with experienced professionals, implementing robust risk management procedures, and being prepared for the underwriting process, companies can position themselves as attractive risks to insurers.
[The end of the article can also include a short disclaimer stating that the content is for general guidance and that specialist advice should be sought for specific circumstances.]