Lupeni Technology, cyberattacks, inflation, supply chain issues, and other trends could affect your business’s bottom line in 2022
- AI is poised to impact all segments of insurance for customers and insurers
- Level 3 self-driving commercial vehicles could emerge in 2022
- Supply chain issues are impacting businesses and business interruption coverage
- Inflation is impacting every link in the supply chain as well as customers
- Remote workforces continue to pose challenges in terms of liability protection
- Cybercrime remains a large threat to small businesses
As we reach 2022’s midpoint, we’ve noticed many strong business insurance trends that you should know about as a small business owner. Some trends have arisen due to COVID and the continued preference for remote work (at least by employees). Others have origins in technology, including driverless cars and artificial intelligence (AI). We also can’t forget the impact of cyber thieves who continue to target small and medium-sized businesses, searching for private data and even ransoms.
Let’s look at the top eight trends that Florida business owners should watch throughout the rest of 2022 and into next year.
Trend 1: Technology and the insurance industry
Technology has impacted the insurance industry just as it has other every other sector, particularly when it comes to auto insurance. One technology that’s transforming the insurance sector as we speak is AI.
There are five critical areas in which AI could transform your experiences with insurance companies. They are:
- Customer service
- Claims management
- Predictive underwriting and pricing
- Insurance fraud detection
- Driverless cars and insurance coverage
Trend 2: Driverless cars
The rise of self-driving vehicles means that we’ll be relying more and more on machines to navigate our roads. In 2022, we could see Level 3 self-driving vehicles emerge. These types of cars use “conditional automation,” which is a technology that enables them to drive themselves under certain conditions. However, a driver must still be ready to take over at a moment’s notice.
The question for the insurance industry remains the same: Who is responsible if there’s an accident? How do you insure a driverless or semi-autonomous car? How do you establish “who” was in control at the time of the accident?
These are essential questions in terms of liability and insurance underwriting.
Trend 3: Ongoing supply chain issues
Daily news reports sound the alarm regarding the scarcity of raw materials, parts, electronics, and technology. From lumber to computer chips to shortages of baby formula and other essential food/beverages, nearly every industry has felt the impact of low or dwindling supplies. Many small businesses rely on international suppliers in Europe, the Middle East, and Asia.
Once goods reach our shores, we’re still dealing with backups at ports around the country and truckers to transport products to suppliers and stores. The U.S. is still struggling to catch up with supply and demand, which causes delays at every stage of the supply chain.
Unfortunately, business interruption insurance may only go so far in elevating your pain. There are limits based on the reason for the disruption. Some plans limit claims only to physical damage, such as natural disasters or fires at a factory supplier.
Trend 4: Inflation and rising prices
Many families are feeling the squeeze of a struggling economy but business owners have been impacted by inflation, especially small business owners who may operate on razor-thin profit margins. The cost of doing business is on the rise. Inflation, supply disruptions, and rising fuel costs often mean you have to charge higher prices to acquire the resources needed to keep your company running. You’ll likely find that you’re paying more for goods and supplies you buy from distributors or other companies, which means charging your customers more.
It’s a never-ending cycle that hurts everyone at every point in the supply chain.
Trend 5: Lawsuits against directors and officers
We still live in a litigious society, and today corporate leaders are exposed to a greater risk of lawsuits due to employee practices, lack of compliance, and investor grievances. D&O Insurance can cover cases directed at Boards of Directors and Officers, but coverage varies significantly by state and industry. For instance, lawsuits brought by employees may be exempt from your policy, in which case, you’d also need Employment Practices Liability Insurance (EPLI).
Trend 6: Risks based on global work trends
COVID-19 sent many companies scrambling to cobble together a remote work format. It worked so well that workers don’t want to go back to an office setting in many cases. Many companies have also found that remote workforces mean cutting some expenses significantly.
However, remote workers also pose challenges for both companies and insurers regarding commercial liability, property insurance, professional liability, employee practices, workers’ compensation, and cyber liability.
Several questions have arisen, including:
- How do you insure property or equipment that’s being used offsite?
- How do you protect remote-connected employees, networks, and devices from cyber threats?
- How do you handle workers’ compensation claims?
- How do you ensure best practices for safety and risk management?
- How do you ensure best employment practices?
Trend 7: The continued threat of cybercrime
Small businesses in Florida and around the country face the ever-present (and ever-rising) threat of cyber events. A single crime can cost you thousands in lost revenue, time, and expenses related to recovering data, informing those affected, and possible fines, legal action, and lawsuits.
Some of the most pressing threats include:
- New phishing scams
- More sophisticated ransomware attacks
- Supply chain attacks via cloud-based systems/networks
- Using AI to develop better malware systems that defeat commercial detection systems
- Targeting of parcel and shipping sectors (stealing packages and private customer information)
Trend 8: Expanded distribution and marketing channels
Like disruptions brought on by technology, new social media platforms have opened up novel avenues for digital sales. The rise of new social media networks like TikTok and WeChat has opened up new channels to reach potential customers. COVID-19 saw an unprecedented (and necessary) growth in e-commerce across all industries and sectors.
According to Standard & Poor’s 2022 Commercial Insurance Industry Outlook, “the tech industry’s role in influencing customer behavior will help shape the future of insurance distribution.”
Avante can keep you up-to-date with your insurance needs
These 2022 business insurance trends could have a tremendous impact on your company’s success and bring about necessary changes to your commercial insurance coverage. Avante Insurance can help you secure the right policies so that you stay in business through the rest of this year and beyond. Contact us today to talk about updated coverage needs.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.