Certain parts of the Australian insurance market are showing signs of hardening already.
We are seeing insurers not insuring certain kinds of risks such as for directors and officers generally, but in particular, D&O Side-C coverage for investor claims, referring to products that protect companies from claims made against it and its directors and officers.
High-risk property is also becoming harder to place.
These are property risks where they have a lot of issues around the building – buildings that are unoccupied, poorly maintained or generally in a distressed condition.
Professions and businesses with a history of losses are also likely to find it harder to secure the kind of coverage they're seeking,
Taking advantage of a soft market
The two main ways you can take advantage of a soft market are through locking in savings on premiums and excesses, or by securing higher policy limits or broader cover now if you will need it later.
For example, if you have cover for $5 million and you know you are soon going to need it expanded to $10 million, it may be easier to get now and cheaper in the long run.
Business Insurance for Women may also be able to lock in future renewals on a favourable basis.
How to prepare your business
There are two main ways in which you can ready your business for a hard market.
The first is by factoring in increased costs. If you're aware of the cyclical nature of the insurance market, you have probably been taking advantage of its current state and may have prepared by saving for the inevitable: more expensive premiums, higher excesses, lower policy limits or narrower coverage.
If not, start factoring in these costs now.
The cost is going to be significant, so businesses must budget for the increases if they want to maintain their cover.
The second way is by having a long term relationship with your insurance broker. No matter what stage of the cycle the market is at, a good broker will understand it and your business, have good long-term relationships with insurers and be able to secure you the best cover for your individual circumstances, as well as being able to advise on likely future changes to insurance costs.
A good broker is also invaluable in a hard market when policy wordings are narrower, limits are lower and excesses are bigger.
Business Insurance for Women will be your advocate should a claim be rejected.