The costs for U.S. companies taking out insurance for any amount or scope of coverage is on the rise, says a new report just published by the Wall Street Journal.
The newspaper notes that after a protracted period of declining liability and property rates, “insurers have raised prices aggressively in the past year.”
The report adds: “And they have warned that price hikes are likely to continue.”
Overall, the rates for property-casualty insurance jumped nearly 7 percent last year, making it the largest such percentage increase in nearly two decades.
The paper notes that reasons for the insurance cost hikes are related to the more than $2 trillion the insurance industry paid out in the last several years due to wildfires, hurricanes, and other natural disasters.
Losses due to mechanical breakdowns within production facilities and even building fires have also contributed to the cost increases.
According to survey put together by the Associated General Contractors of America, insurance costs for contractors have nearly doubled over the last 8 years.
Speaking late last year at a Council of Insurance Agents & Brokers meeting in Colorado Springs, David Bresnahan, vice-president with the Boston-based Berkshire Hathaway Specialty Insurance Company, predicted that companies should be “planning on rate increases every year for the next five years.”
Bresnahan explained his forecast by noting that “there is no sign of tort reform or anything else coming that would stem this tide.”
By Garry Boulard
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