Inflation is expected to impact insurance costs in 2023 for construction contractors. However, the rate of increase in premiums may vary depending on several factors, such as the class of business, the type of damage or loss, and the state where you operate your business.
In the blog, we will discuss the expected rise in costs for several insurance coverages for 2023 and the reasons behind the increase.
Insurance Coverages and their Expected Cost for Contractors in 2023
Suppose you plan to buy or renew the different coverages in your contractors insurance policy. In that case the following are the changes you may expect in the coverage costs as predicted for 2023.
- General Liability Insurance
For contractors, the liability payouts are mostly for on-site injuries and building damage. With an increased in medical expenses and the cost of repairs, the amount your insurance provider pays to the affected party may increase. However, the rate increase is expected to be manageable and mostly below 5% for your contracting business.
- Auto Insurance
For replacing vehicles totaled in an accident, the costs are higher today, as are auto repair costs. Insurance companies need extra funds to cover the increased claim costs that they expect to collect from increased premium rates. Due to the rise in social and healthcare costs, liability claims costs have also increased. You may expect an increase of around 10% in your auto insurance rates.
- Property Insurance
With several incidents of damage to construction property across the country due to varied reasons such as hurricanes and wildfires and higher replacement costs, there may be an increase of about 10% in your property insurance rates, needed by insurers to cover claim costs.
- Workers’ Compensation
The rates for this insurance have been stable over the last decade and are expected to remain the same for 2023. By controlling the number of claims and adopting effective return-to-work programs for workers, contractors have seen minimal or no increase in the rates despite an increase in medical care costs.
- Umbrella Coverage
Due to inflation, the umbrella claims will increase due to spillover from auto and general liability coverages. They may not be adequate for the liability payout due to increased prices. You may expect around a 20% increase in umbrella coverage rates.
- Professional Liability
The increase in professional liability insurance rates is expected to be less impacted and see around a 5% rise. This is due to increased access to this coverage by insurance companies and its competitive pricing available to contractors.
- Executive Protection Liability
For this coverage, which includes D&O, EPLI, crime, and fiduciary liability, the rise is expected to be around 5% for a new purchase or a renewal.
- Cyber Insurance
The cyber insurance coverage rate is the most volatile. Even after implementing MFA and EDR and with no prior claim history, you may see an increase of over 25% in your premium.
Secure Your Contracting Business with CDF-Artisan Insurance
If you want to learn more about the renewed rates for your contractors insurance coverages in 2023, contact our team today. At CDF-Artisan Insurance Solutions, we can help you get the right coverage customized to suit your unique requirements.