Why are My Commercial Property Insurance Costs Rising?

July 07, 2023

By Casey Myers

If you haven’t adjusted your commercial property insurance coverage recently, you may end up paying more after a loss. But why are costs rising? And what’s driving those increases?

Several factors are impacting rates, including construction material prices, supply chain disruptions, worker shortages and the weather.



Although the prices of construction materials have eased, they’re still historically high.    


Supply Chain Disruptions & Labor Shortages

Labor issues and supply chain disruptions have been contributing to inflation for the past few years. The ongoing long-distance van operator shortage is a significant part of the equation for the moving and storage industry. In addition:





From severe storms to tornadoes, natural disaster statistics reveal that disasters are occurring more frequently and with greater intensity. Over the past five years, the U.S. has experienced an average of 18 billion-dollar climate disasters each year.


The U.S. has sustained 357 weather and climate disasters since 1980 where overall damages/costs reached or exceeded $1 billion (including CPI adjustment to 2023). The total cost of these 357 events exceeds $2.540 trillion. Businesses should expect an additional emphasis on weather readiness and risk mitigation efforts from insurance providers.

It's important to note that insurance rate changes can vary by region and individual circumstances. To understand the specific reasons for rate increases, it is always a good idea to consult your insurance broker.  They can provide guidance based on a thorough understanding of your business needs.