Rapid technological changes and new business models are two reasons both insurers and entrepreneurs need to stay on top of trends if businesses are to be adequately protected. This is due to five major shifts business leaders and insurance companies are facing with the unexpecting risks arising around them.

1. Speed and ease of use 

The Internet has made the world of business faster and more user-friendly, and today’s entrepreneurs expect things to be easy to use and practically instant. Their expectations of insurance are no different, whether it’s buying a policy or tracking the claim process. This expectation is making insurance companies work harder to make their policy wordings simpler. They are taking out some of the legal language and fine print to make things simple while looking out for the security of their policyholders.

2. Cyber risk and technological advances 

The expression “cyber risk” can make business owners nervous, knowing they need to protect their customers’ personal information from hackers and data breaches. Moreover, as the technologies that run computers and industrial equipment change substantially every two or three years, companies must protect themselves against their obsolescence.

3. Globalization of markets 

The explosion of imports and exports has led insurers to create numerous insurance products designed to protect not only goods in transit but also companies’ general liability. Globalization is also making liability insurance much more complicated because the laws that affect legal proceedings and damages are different from one country to the next.

4. Climate change 

Climate events, such as hurricanes, tropical storms, and floods, cause devastating damages and are keeping insurance companies and business leaders ready for anything.

In Canada, water damage is now the leading cause of insurance claims, dropping fire to second place. This is due to the severity of heavy precipitation events, both rain and snowfall, putting pressure on buildings and infrastructure. Entrepreneurs must make sure they are covered for this type of damage to their business.

5. The sharing economy 

The successful business models of the “sharing economy” (where individuals or companies make goods and services available to others on a collaborative basis) are not going to go away. Their successes are forcing insurance companies to review the way they do business. Not only do insurers need to provide coverage for the property being shared, but also insure its use and the individuals who use it.

With this new business model, people feel as though they need to be protected on both sides of the transaction for the sharing economy to operate. The proper policy can help to protect against this risk.

Regardless of what business sector your company works in, many potential problems can be prevented by keeping up to date on the new risks that may affect your business in the not-so-distant future. The world is changing, and insurance is evolving with it. If you have any questions or concerns about your business’ policy, contact your OTC Insurance broker or click below to learn more.

SOURCES

https://www.theglobeandmail.com/business/small-business/article-insurance-is-becoming-a-major-cost-constraint-for-small-businesses/
https://www.canadianunderwriter.ca/insurance/as-cyber-attacks-increase-insurers-in-the-space-face-rising-losses-1004213427
https://www.aig.ca/business/products/marine-inland-marine/cargo-insurance
https://www.thestar.com/news/canada/2021/02/18/2020-insured-damage-from-severe-weather-tops-23b-in-canada-island-municipalities-know-first-hand-the-costs-of-high-water-levels-and-extreme-storms.html
https://www.insurancebusinessmag.com/ca/news/breaking-news/insurance-for-global-sharing-economy-needs-to-evolve--marsh-312194.aspx sharing economy – insurance