Published: 15/04/10
In today’s uncertain world, business managers know that protecting their company’s assets via a commercial insurance policy is absolutely essential to success. These policies step in to cover costs associated with repair or replacement should natural or accidental disasters like fire, theft, damage, or earthquakes significantly disrupt their usual business operations.
Luckily, companies looking to buy new policies or change their current providers in favour of a better deal can enjoy the wide variety of competitive policies at low prices in this current buyer’s market. While it’s true that this market’s supposed favourites vary somewhat depending upon the types of coverage being sought, experts generally agree that presently the commercial insurance market is “soft”, meaning that it is experiencing the downswing in its cycle that most favours buyers.
The basic rule of thumb stipulates that insurance markets experience a three years on, three years off cycle. After being “hard”, or strongly favouring insurers, for about three years, the market will begin to circle back towards being “soft” again. In terms of actual effects, “soft” markets are preferable to buyers because insurers are competing to grab up new clients. As they continuously try to outdo their competition, they end up offering lower premiums, more comprehensive service packages, and more extensive coverage plans.
Predictably, this downward drive of prices over time leads to unsustainable losses for commercial insurers, who begin to both raise rates and restrict their coverage policies. Hence, a hard market of roughly three years can be expected at this point in the cycle.
Today, however, it seems companies seeking insurance policies for conventional damages and accidents like fire and theft have a slight advantage and are enjoying lower total costs associated with insuring their business. Specialised coverage plans, on the other hand, like those which handle legally thorny issues like worker’s compensation or hazardous materials transport, seem to be stuck in the previous cycle’s “hard” phase.
Flint Insurance are commercial insurance specialists. Get an instant online commercial insurance quote or call 0800 021 4504 for further details.
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