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Businesses are reopening across the nation and a sense of normalcy is cause for celebration. But you might want to hit the brakes on the festivities when your insurance renewal arrives.

Sticker shock: The new normal is far from business as usual.

While businesses waited for supply to catch up to demand, other calamities didn’t wait — instead, they kept coming. Extreme weather events, variant spikes, international port delays, protests, business and travel reopenings, worker shortages, war and inflation all added to the strain. Like the classic “I Love Lucy” scene where Lucy crams candies into her mouth in response to the increasing speed of the conveyor belt, insurance has been trying to keep up with the frantic pace of catastrophic events.

The result is what’s known as a hard market. What does that mean for you and your business?

A “hard market” means competition and high prices

Insurance is in a hard market, which means rates are rising and insurance companies are becoming more selective about what client liability they’ll accept. In the wake of the pandemic, the industry is experiencing an unusually high number of claims, from property damage to liability lawsuits. Insurance companies are also fielding lawsuits on all sides, either defending their clients or protecting themselves from clients suing them. While the courts are busy interpreting the meaning of insurance policies in these extraordinary times, the insurance companies are refining their policy language and exclusions to limit the risk they’re forced to absorb.

For you as a business owner, insurance probably feels overwhelming already, even without the unusually high price tags you’re currently facing. Now is an ideal time to get professional guidance and seasoned advice on choosing commercial insurance that’s going to respond when you need it. As the pandemic has taught us all, the difference between a good safety net and a bad one can be the determining factor between a strong, resilient business and bankruptcy.


Rising inflation means increasing insurance premiums in response to the economic climate (also complicated by a pandemic backlash). In addition to supply chain woes, the worker shortage continues as the cost of labor and materials skyrockets. Weather events rack up annual catastrophic losses putting reserves and reinsurers in a tight spot. The cost to repair or replace things is much higher, and premiums reflect that shift.

Social inflation and the hardening market

Social inflation is on the lips of many agents (and lawyers) because it’s been a driving factor in increased insurance costs. Social inflation is an industry term that refers to the rising cost of litigation, a widening lens on liability and jury verdicts resulting in higher awards. Some lawsuits, for example, have fetched jury verdicts of over $10 million (known as “nuclear verdicts”), which have only exacerbated the hardening market.

With that kind of money at stake, more plaintiffs are taking their chances at trial or countering rather than accepting initial insurance settlement offers. Paying it forward, in the case of insurance, means passing higher costs to the consumer.

Supply chains are also hardening the market

Thanks to the pandemic, you’ll never be in the dark about supply chains again. In the early days of COVID, limited access to paper products and electronics cleared the path for supply chain discussions. Suddenly the interrelated economy became part of normal dinner table conversation. Can’t get a laptop for months? It’s the supply chain. Toilet paper shortage? Thank the supply chain.

Right now we’re experiencing a bit of 2020 all over again. Supply chains are again the talk of the town, only this time the problem is even more significant. Shipping container shortages, gridlock at international ports and outrageous shipping charges have created ripples in the downstream supply chain, affecting insurance rates.

The supply chain and social inflation might even send certain types of insurance into a supply shortage of their own as insurance companies depart riskier markets. That means more competition with fewer insurance companies to absorb particular risks. It’s no longer a buyer’s market.

What types of insurance are affected?

The short answer is all types of insurance are being affected. But here are a few that might be harder to secure:

We’re your secret weapon in a hard market

Independent agents serve their clients’ best interests, not the insurance company’s. Even in a hardening market, we will search for insurance that fits your needs and budget. We know which insurance companies are poised to take on your industry risk and which ones aren’t worth trying.

It’s important that we have enough time to shop around for you. If you’ve got a few dings on your record, you might need to pay more for coverage or go with a lower-rated carrier. We can help you market your business to make it appealing to insurance companies. For example, if you have a history of injury claims but have been proactive about employee safety training, we can help you present that info to an underwriter in the best possible light.

Going it alone or rolling the dice on an AI-recommended policy won’t get you a personalized approach. Vying for the cheapest policy is tempting, but a cheaper policy can also mean more exclusions and less coverage. And those are the policies that tend to go radio silent when you need help handling a claim.

Call us for a coverage review

If you have concerns about an upcoming insurance renewal, be proactive and give us a call. We understand your frustrations about higher insurance prices and can help you get the coverage you need at an affordable price.