As a business owner, dealing with rising costs may be on your agenda. Businesses of all sizes are feeling the impact of inflation. Along with rising operating expenses, your business insurance costs may also increase. So, why is this happening and how can you manage the premium?
Business insurance premiums can go up for various reasons, including inflation, market conditions, changes in coverage, industry-specific risks, and other factors. Understanding how these factors affect your premium may help you manage the costs.
From business investment to consumer spending, inflation significantly affects our economy. It causes prices to go up, so we get less for what we pay for. This leads to a rise in the cost of living as people need more money to afford the same level of goods and services.
Inflation can affect your business insurance premium in a couple of ways:
Medical and legal costs also rise with inflation. Insurers need to provide public liability insurance cover that meets these increased costs, which means premiums go up.
If you need to make a claim, you trust your insurer to cover your sum insured. That’s why insurers consider inflation when calculating your premium. To reduce your risk of underinsurance, your insurer may adjust your sum insured automatically to reflect rising costs.
However, it's not just inflation that affects insurance costs. Other market conditions and factors affecting similar types of business to your own and factors unique to your business can also influence your premium.
We can’t predict the unexpected, but we can prepare for some insured events, such as storms. Being prepared may help you maintain up-to-date insurance coverage. Visit our extreme weather support page for useful information that may help you prepare before, during, and after an extreme weather event.
Your business is your livelihood, and business insurance cover is there to help you financially if something unexpected happens. Business insurance costs may rise, along with other costs, but it’s important to make sure you have appropriate cover for your needs.
We’re here to help. Reach out to our team of Australian-based Business Insurance specialists if you’d like to discuss your policy.
This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL234708 ("Allianz"). In some cases, information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. The decision to insure and for what amount is a matter for your determination. You may wish to seek professional advice on these issues.
Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.
Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.
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