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Increased insurance rates expected for businesses

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A detailed report published by Marsh found commercial insurance rates are expected to rise in many sectors of the business world.

Some of the types of insurance that are to see a rate increase include lead umbrella insurance. In the fourth quarter of 2011, rates were flat up to 10 percent for lead umbrella coverage, and workers' compensation rate were flat up to five percent. This is expected to carry over into 2012, according to Marsh.  

"Entering 2012, the U.S. insurance market has continued the trajectory developed during the fourth quarter of 2011 and is now in an obvious state of transition," said David Bidmead, U.S. CEO of Marsh. "Although not classified as a 'hard' market, increasingly consistent signs of market correction are prevalent."

Errors and omissions insurance rates are also expected to gradually increase due to the the rise of data breaches and hacking incidents faced by businesses.

According to the New Jersey Star-Ledger, increased insurance rates are also associated with Tropical Storm Irene.

The newspaper said private insurers are currently paying out roughly $915 million in damages due to the storm, which will lead to businesses and homeowners paying higher rates.

Given the anticipated rate increases and the threats faced by businesses, including natural disasters like Irene and man-made hazards like cybercrime, now is likely a good time for entrepreneurs to look into securing coverage.

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