--- title: Market Conditions and the Impact on Business Insurance description: How market conditions impact your business insurance premiums image: https://koppingerins.com/hubfs/How-to-Reduce-Your-Business-Insurance-Costs-600x400.jpg --- [![Koppinger & Associates logo](https://koppingerins.com/hs-fs/hubfs/01609-KA-Logo-CC-1.png?width=1800&height=384&name=01609-KA-Logo-CC-1.png "Koppinger & Associates logo")](https://koppingerins.com) [![Koppinger & Associates logo](https://koppingerins.com/hs-fs/hubfs/01609-KA-Logo-CC-1.png?width=1800&height=384&name=01609-KA-Logo-CC-1.png "Koppinger & Associates logo")](https://koppingerins.com) - [Home](https://koppingerins.com) - Solutions - [Business insurance & P&C](https://koppingerins.com/business-insurance-pc-solutions) - [Employee benefits & HR](https://koppingerins.com/employee-benefits-and-hr-solutions) - [Knowledge Center](https://koppingerins.com/blog) - [About](https://koppingerins.com/about) - [Contact](https://koppingerins.com/contact) - [HR Library](https://auth.zywave.com) # Market Conditions and the Impact on Business Insurance February 23 2023 Categories: [P&C Solutions](https://koppingerins.com/blog/tag/pc-solutions) ![Market Conditions and the Impact on Business Insurance](https://koppingerins.com/hubfs/How-to-Reduce-Your-Business-Insurance-Costs-600x400.jpg) **Inflation has affected nearly every aspect of running a business. ** **Costs of goods and services have risen sharply and rapidly.  The overall consumer price index peaked at a 40-year high of 9.1% in 2022, while core inflation is at its highest since 1982*.*** **Let's take a look at how how this and other factors impact your insurance premium.**   **Several factors contributing to premium for commercial insurance:** - **Property Replacement Costs** - 55% increase in the cost of structural steel - 35% increase in the price of lumber - Material shortages and supply chain disruptions - Skilled labor shortage - Higher rebuilding costs and longer delays may trigger an increase in business interruption losses - **Third Party Litigation - the business of litigation** - Due to high ROI, venture capital dollars are being invested, growing the business of litigation - Driving the cost of claims up by 35%  - Payment to injured parties has gone down by 21% - **Severe Weather** - Hurricanes, floods, wildfires, tornadoes, winter storms frequency and severity - Total insured losses globally in 2022 were estimated at $140 billion due to severe weather - **Reinsurance** - A contract where an entity (reinsurer) shares a portion of risk with the insurance carrier in return for a portion of the premium - Helps spread risk to avoid an unmanageable financial strain on a single entity - Property catastrophe reinsurance has had the most significant losses.  Capacity (availability) has been restricted and pricing has increased over 37%, the largest increase since 1992 - **Auto Accident Frequency/Severity** - Increased risk of litigation - More expensive to repair or replace damaged vehicles - Increased traffic congestion - Unsafe driving behaviors While most of these factors cannot be controlled, there are several proactive steps that can be taken to minimize your risk, including: - Update property valuations to avoid underinsuring - Maintain a business continuity plan in case a catastrophe strikes - Evaluate business income limit to account for longer recovery timelines - Incorporate safety fundamentals throughout your workplace - Maintain strong hiring standards and training programs to reduce employee injury The best method to manage your risk and insurance program is to have a discussion with your insurance advisor who will help anticipate what's on the horizon and the steps you should take to protect your business, reputation, and bottom line. **Don't have clear advisement?** **Contact [Koppinger & Associates](https://www.koppingerins.com/)** **Our clients are at the heart of everything we do** - - - - [mailto:?subject=Market%20Conditions%20and%20the%20Impact%20on%20Business%20Insurance&body=Market%20Conditions%20and%20the%20Impact%20on%20Business%20Insurance%20https://koppingerins.com/blog/market-conditions-and-the-impact-on-business-insurance-premiums](mailto:?subject=Market%20Conditions%20and%20the%20Impact%20on%20Business%20Insurance&body=Market%20Conditions%20and%20the%20Impact%20on%20Business%20Insurance%20https://koppingerins.com/blog/market-conditions-and-the-impact-on-business-insurance-premiums) [Previous post](https://koppingerins.com/blog/millions-losing-medicaid-impacts-your-employee-benefits-budget) [All posts](https://koppingerins.com/blog) [Next post](https://koppingerins.com/blog/promising-to-fulfill-impossible-obligations-breach-of-contract) ## Related Articles #### [Current Form I-9 Version Expiring October 31, 2022](https://koppingerins.com/blog/current-form-i-9-version-expiring-october-31-2022) #### [Ready for AI? A Strong Framework is Your First Step](https://koppingerins.com/blog/ready-for-ai-a-strong-framework-is-your-first-step) #### [Are Silent Threats Putting Your Business at Risk?](https://koppingerins.com/blog/are-silent-threats-putting-your-business-at-risk) [![01609-KA-Logo-WH](https://koppingerins.com/hs-fs/hubfs/01609-KA-Logo-WH.png?width=300&height=64&name=01609-KA-Logo-WH.png "01609-KA-Logo-WH")](https://20500700.hs-sites.com/) 3060 Commerce Dr. Suite 4 Fort Gratiot, MI 48059 At Koppinger & Associates, we are a team of dedicated insurance advisors who put the needs of our clients first. Through a personalized approach, we help guide you to the right insurance solutions for your business while treating you with care and excellence. 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