Business Insurance Costs Are Climbing — 5 Brilliant Ways to Save

It’s frustrating to see your business insurance costs go up at every renewal—especially when you haven’t made any major changes or filed claims.

If you’re wondering why this is happening and what you can do about it, you’re not alone.

At The Ross Maghan Agency, we help small and midsize businesses in New Jersey stay protected while managing insurance costs effectively. Whether you’re running a construction company, managing a retail store, or operating a professional service, understanding what drives your premium increases is the first step toward getting them under control.

Here’s a breakdown of what’s driving these rising costs—and what you can do to take back control.

What’s Driving Higher Business Insurance Premiums?

Commercial Property and Auto Insurance

While commercial property insurance increases have slowed somewhat, commercial auto insurance continues to rise sharply—well above the inflation rate.

Several key factors contribute to these increases:

• Your business location and its risk of crime, theft, or severe weather
• Your past claims history, even if the claims were minor
• The type of work your business does and how that affects your risk exposure
• The increasing cost and severity of auto accidents, especially those involving injuries

Even if your business hasn’t filed a claim recently, insurers may increase rates across the board due to broader regional or industry-wide trends. For example, if you’re in an area with frequent storm damage or a high volume of traffic accidents, you may see rate increases regardless of your individual performance.

Commercial Liability Insurance

Liability insurance costs are climbing, especially for umbrella policies and commercial auto liability. This is largely due to:

• A high volume of small liability claims that may seem minor but add up quickly
• Large lawsuits and “nuclear verdicts” that result in expensive settlements
• Fewer insurance carriers offering certain types of liability coverage due to the increased risk

Industries like healthcare, construction, manufacturing, and real estate are particularly affected because of the potential for property damage, injury, or professional liability claims. These sectors often require specialized coverage, which can be more expensive and harder to secure.

The Impact of Litigation on Insurance Costs

One of the lesser-known drivers of rising business insurance costs is the surge in litigation backed by third-party investors. These litigation finance companies fund lawsuits in exchange for a portion of any settlement or award. This practice leads to more lawsuits being filed—and higher payouts when they succeed.

Staged or exaggerated claims are also becoming more common. Insurers must spend significant resources investigating and defending these cases, and those costs are passed down to all policyholders in the form of higher premiums.

Not All News Is Bad

While many lines of business insurance are increasing in cost, there are still a few bright spots:

• Cyber liability insurance is becoming more affordable as insurers better understand digital risks and require stronger cybersecurity protocols.

• Directors and officers (D&O) and employment practices liability (EPL) coverage have seen pricing relief due to more insurers competing in these markets.

However, these favorable trends may not last. As more claims are filed and legal costs continue to rise, these lines may also see upward pressure in the near future. It’s wise to review your coverage annually and lock in favorable rates while they’re available.

How to Reduce Your Business Insurance Premiums

There are several proactive steps you can take to help control your business insurance costs:

• Implement strong risk management practices and keep them up to date
• Maintain a clean claims history or show evidence of corrective action after a claim
• Increase your deductible or self-insured retention where appropriate
• Consider premium financing to help manage large annual payments
• Keep thorough documentation that demonstrates your business’s safety protocols and financial stability

Working with an independent insurance agency like The Ross Maghan Agency gives you access to a broader range of carriers and specialty markets. This flexibility often results in better pricing, more customized coverage, and fewer gaps in protection.

Let’s Find the Right Coverage at the Right Price

Business insurance is essential for protecting your company from unexpected losses—but that doesn’t mean you have to overpay. At The Ross Maghan Agency, we’ll help you find the right coverage at a price that fits your budget and risk profile.

Call us today at (732) 566-0003 or request a quote online at
https://maghaninsurance.com/contact-us

Let’s work together to protect your business—and your bottom line.