The Insureon Small Business Institute (ISBI) today released a report detailing pricing trends for commercial insurance sold online to the nation's smallest businesses. The Small Commercial Insurance Online Pricing (SCIOP) Index for Q3 2013 shows that, in the online space, policy prices increased by 2% overall year over year for the nation's smallest businesses.
So what does a 2% price increase between Q3 of 2012 and Q3 of this year mean for small-business owners? In brief, it suggests that the Internet is the place to go to buy small business insurance. A leading price index provided by MarketScout for Q3 2013 showed that, overall, business insurance rates increased 4% in November.
The 4% increase includes prices for businesses of all sizes and policies purchased through traditional channels. The ISBI numbers, on the other hand, reflect data for a smaller subset of the commercial insurance market: small businesses (including freelancers and independent contractors) who purchase insurance online.
Changing Insurance Needs for Small Businesses
In addition to illuminating overall trends in small commercial insurance purchased online, the ISBI report offers insight into trends in insurance requirements for small and micro businesses. Specifically, the report notes that…
- Information technology (IT) professionals should anticipate increasing demands for E&O coverage from their largest clients. In other words, IT pros can expect clients to demand higher limits on their E&O policies. With higher limits come higher policy costs.
- Restaurant owners, retailers, and others who handle large volumes of credit card transactions can expect data security risks. Luckily, more insurance carriers are making Cyber Liability policies available to small businesses looking to manage their cyber risks.
- Workers' Compensation costs, which rose in most of the country in Q3 2013, are likely to continue rising in coming years.
- Business Owner's Policies, which bundle General Liability and Property Insurance in a small-business-specific package, may increase in cost for businesses located in areas where severe weather has caused serious damage in recent years.
Download the full SCIOP Index report for more details about how small business insurance prices have changed in the last year.