A tough market can be hard for anyone, but especially for those who are unprepared. Luckily, there are ways Florida commercial property owners can be proactive and help out. (Credit: michaklootwijk/Adobe Stock)
Florida commercial property owners are worried, and rightfully so: In the wake of hurricanes that have battered the Gulf and Atlantic coasts this year, businesses across Florida are bracing for significant increases in catastrophe property insurance, with some seeing renewal rates increase by up to 125% or more.
Increasing risks and rising losses from catastrophic natural disasters have led insurers to raise premiums, limit coverage options, and even exit the market. These changes, along with recent regulatory changes, have placed the onus on insurers to protect their policyholders themselves.
A tough market presents challenges for everyone, but especially for those least prepared. Luckily, there are ways for Florida commercial property owners to be proactive and help.
Understand your coverage.
In a tough market, preparation is key. In addition to monitoring industry trends and legislative changes, property owners must be proactive in taking strategic steps and using the right tools to minimize the impact of rising insurance costs and maximize coverage terms. Understanding the details of your insurance program is the first step. In this case, knowing what you don't cover is just as important as knowing what you do cover. Make sure your terms meet all your requirements and will protect you in the event of a catastrophic claim.
Understand your exposure.
It's important to understand your business needs and risk tolerance before seeking or renegotiating coverage. Whether you need comprehensive all-peril coverage or just protection against catastrophes, a thorough exposure analysis will uncover hidden vulnerabilities and help you understand your risks. This will ensure your insurance strategy is aligned with your business goals and insurance requirements, allow you to look at your needs from a new perspective, and foster creative solutions that optimize coverage and reduce costs.
Consider alternative solutions.
Changing market trends require creativity in insurance buying strategies, and new products bring new opportunities. For example, parametric insurance triggers coverage based on the occurrence of a specific event, not just physical damage. This type of insurance is particularly useful for covering deductible liabilities associated with high deductibles, or as an alternative to traditional indemnity-based coverage when traditional coverage cannot be purchased (due to lack of capacity or prohibitive pricing for available capacity). Parametric insurance can be a valuable complement to traditional coverage and also serve as a tool to address specific risks not covered by traditional methods.
Additionally, consider adjusting your terms and conditions to balance cost and coverage. Using a flexible and analytical approach can help you manage costs and devise a solution that meets your unique business needs.
When considering alternative solutions, keep in mind that what works for one business may not work for another. Be sure to analyze each alternative and consider options outside of your existing program structure before purchasing.
Stay prepared and protect your business.
We may be in the midst of one of the toughest insurance landscapes we’ve ever seen, but Florida commercial property owners have the tools to survive in this tough market. By adopting proactive strategies, businesses can weather the storm of rising property insurance costs while protecting their assets and financial stability.