Traditional vs. Roth IRAs

/in /by

Both traditional IRAs and Roth IRAs can help you save for retirement. But they have different rules about taxes on contributions and withdrawals, what happens if you need to take money out before retirement, and other things that can affect which account type you might be better off contributing to. We’ve answered some of the top frequently asked questions about the differences between Roth and traditional to help you decide.

Is there a difference in how much I can contribute to a Roth vs. a traditional IRA?

The maximum yearly contribution to traditional and Roth IRAs is $7,000 for 2025 It increases to $7,500 in 2025. Those 50 and older can make an additional catch-up contribution of up to $1,000 to their traditional or Roth IRA in 2025 and 2026, as well. In the case of a Roth, you may not be eligible to contribute that much, however, depending on your modified adjusted gross income (MAGI) or your filing status.

Recent legislative changes have also eliminated age limits for traditional IRA contributions. Additionally, the age at which required minimum distributions must begin was raised to 73. It will climb to age 75 starting in 2033.

Can I contribute to a Roth or traditional IRA no matter how much I earn?

No, at least for Roth IRAs.

  • For married couples filing jointly, the ability to contribute to a Roth IRA starts to phase out when modified adjusted gross income (MAGI) reaches $236,000 in 2025. It is eliminated when MAGI reaches $246,000 in 2025.
  • For taxpayers who are filing single or head of household, the ability to contribute is eliminated when MAGI reaches $165,000 in 2025. It starts to phase out at a MAGI of $150,000 in 2025.
  • For taxpayers who are married but filing separately, the ability to contribute is eliminated when MAGI reaches $10,000 in 2025.

Calculate MAGI by subtracting from adjusted gross income any deductions for traditional IRA contributions, student loan interest, tuition and fees, and certain other, less-common above-the-line deductions (like the foreign earned income exclusion and the foreign housing exclusion that some expatriates take).

If you have a traditional IRA, you can contribute no matter how much you earn, but you may not be able to take a tax deduction for your contribution. If you or your spouse are covered by a workplace retirement plan and your income exceeds $87,000 for single taxpayers or $143,000 for married taxpayers filing jointly, in 2024, you will not be able to claim a deduction. Those limits climb to $89,000 and $146,000, respectively, in 2025. You can still make after-tax contributions, however.

How are my contributions and withdrawals taxed on Roth and traditional IRAs?

With a traditional IRA, you do not pay tax on the money you contribute (in other words, contributions are made with pretax dollars), but you do pay tax on the money you withdraw. With a Roth IRA, you do pay tax on the money before you contribute (after-tax dollars), but you do not pay tax on the money you withdraw. In both types of IRAs, your earnings and gains aren’t taxed while they remain in the account.

Here’s a simplified example to illustrate the difference between the two IRA types.

  • Traditional IRA: You contribute $5,000 of pretax money to a traditional IRA in 2024. When you retire in 2038, your money has grown hypothetically to $10,000. Your marginal tax rate is 22 percent. You withdraw all $10,000 and pay a 22 percent tax on it, or $2,200, leaving you with $7,800. But you saved 22 percent of $5,000, or $1,100, when you made your contribution, because your contribution was not taxable. So, you really ended up with $8,900 or more, depending on how you used the $1,100 in up-front tax savings.
  • Roth IRA: You contribute $5,000 of after-tax money to a Roth IRA in 2024. Since you are in the 22 percent tax bracket, you had to earn about $6,400 to contribute that $5,000 in the first place. When you retire in 2038, your money has hypothetically grown to $10,000, but at the sacrifice of the $1,400 in up-front taxes you paid, so it’s like you’re only making out with $8,600. However, you get to withdraw all $10,000 tax-free.

Either way, you pay taxes; it’s just a matter of when. And while this example might make it seem like you’ll come out ahead by contributing to a traditional IRA, that’s not always the case. It all depends on your marginal tax rate at the time you contribute and at the time you take withdrawals, which, unfortunately, most people do not know with certainty ahead of time. And, of course, rates of return in various types of IRAs will vary as well.

In this example, we assumed the same 22 percent tax rate both when you contributed and when you withdrew, but in reality, your tax rates will probably be different. Because you can’t know these things ahead of time, it may be strategic to contribute to both types of accounts.

So, I do not have to choose between a Roth IRA and a traditional IRA — can I have both?

Yes, and in fact, retirement planning experts recommend having a combination of post-tax and pretax accounts to draw upon in retirement. This might mean having both a Roth IRA and a 401(k) or both a Roth IRA and a traditional IRA. Since you do not know what your income or tax bracket will look like during any given year of your retirement, having the option to withdraw money from a Roth tax free in years when your income is higher and to withdraw taxable funds from a traditional IRA in years when your income is lower can keep your tax bill down.

Should you always contribute to a Roth IRA and a traditional IRA every year?

Not necessarily. The conventional wisdom says that if you’re in a lower tax bracket when you make contributions than when you take withdrawals, you’ll come out ahead with a Roth. If you’re in a higher tax bracket when you make contributions than when you take withdrawals, you’ll come out ahead with a traditional IRA.

My spouse is taking a few years out of the workforce to raise our young children. Can I contribute to an IRA on my spouse’s behalf?

Yes, but you must file jointly, and your MAGI must be less than $230,000 to receive a deduction. Your total contributions cannot exceed your total compensation. So, if you only make $9,000 for the year, you cannot contribute $5,500 to your IRA and $5,500 to your spouse’s IRA, which would total $11,000. You’d have to reduce your contributions to either or both of your IRAs to a total $9,000 or less.

Note that someone else could contribute to your IRA on your behalf, as long as their contribution (plus your contribution, if any) does not exceed your annual taxable income.

Also, let’s say your 16-year-old son earned $3,000 from a part-time job and you wanted to give him a huge jump start on saving for retirement. You could open an IRA for him and contribute $3,000. Just be aware that your generosity might have implications for college financial aid.

When do I get to take the money out?

Normally, when you’re 59½, you can withdraw both earnings and contributions from either type of IRA without paying any penalties. Roth IRAs do have a rule preventing the earnings portion of the account from being tapped for five years from when you established the account. Once you reach age 73, if you have a traditional IRA, you’re required to withdraw a certain amount from it each year, called a required minimum distribution (RMD). If you do not withdraw your RMD, you may have to pay a hefty 50 percent excise tax on the amount you were required to withdraw. With a Roth IRA, you are not required to take distributions from it. You can pass the entire account on to your heirs and let them worry about RMDs.

I may need the money for something else. Should I still contribute to a Roth IRA and a traditional IRA?

Yes, for several reasons. In a best-case scenario, you won’t need the money for something else and you’ll have made extra contributions to your retirement account that can grow for years. The more you contribute and the younger you are when you contribute, the faster your money will grow from investment returns and the less principal you’ll have to contribute over your lifetime to end up with a nice nest egg.

As long as it has been at least 5 years from when you first established and contributed to a Roth IRA, a Roth IRA allows you to withdraw your contributions (but not your earnings) without paying taxes or penalties.

With a traditional IRA, you can remove money early in exchange for paying a 10 percent penalty on the amount you withdraw. You’ll also pay income tax on your withdrawals, just like you would in retirement. IRAs do not allow loans, but if you have a 401(k), you could consider borrowing from that account if the plan permits. With traditional IRAs, one exception to the 10 percent penalty is the ability to take up to a $10,000 distribution as a first-time homebuyer. You’ll have to pay income tax on that withdrawal, however, which will reduce the amount you can actually put toward your down payment.

 

Provided by Cross Coastal Advisors, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). ©2025 Massachusetts Mutual Life Insurance Company (MassMutual®), Springfield, MA 01111-0001. All rights reserved. MM202607-306009

What ‘Social Inflation’ Means for Your Business

/in , /by
What ‘Social Inflation’ Means for Your Business Heading into 2026

You may have heard that liability insurance rates are rising—again. But do you know why? One of the biggest drivers behind these increases is a growing trend called “social inflation.”

Understanding this trend can help you make smarter, more strategic decisions about your commercial insurance before your next renewal.

What Is Social Inflation?

“Social inflation” refers to the rising costs of insurance claims due to changes in society’s attitudes, legal systems, and jury behavior. A few key reasons for this trend include:

  • Larger jury verdicts in liability lawsuits
  • More aggressive plaintiff attorneys seeking maximum payouts
  • Third-party litigation funding from outside investors
  •  Shifting public sentiment toward holding businesses financially responsible

When claims cost insurers more, those costs are passed along to businesses through higher premiums, stricter underwriting, and more restrictive coverage options.

Lines of Insurance Being Hit Hardest

While social inflation affects all types of liability coverage, some lines are especially impacted:

  • • Commercial Auto Liability: Claims involving vehicle accidents—especially with fleets or trucks—are seeing sharp increases in costs and frequency.
  • General Liability: Even routine injuries like slip-and-falls can now result in higher-than-expected payouts.
  • Umbrella & Excess Liability: These policies are no longer “cheap peace of mind.” Higher rates and stricter underwriting are common.

Even businesses with clean loss histories are experiencing rate hikes due to overall market pressure.

Why It Matters for Your Business

In today’s legal climate, a seemingly minor incident can lead to a lawsuit that exceeds your insurance limits. Without adequate protection, your business could be left financially vulnerable.

Potential consequences of insufficient coverage include:

  • • Multi-million-dollar verdicts from seemingly small incidents
  • Legal disputes that drag on for years
  • Reputational harm, even if the claim is eventually dropped
What You Can Do Now

Here are a few proactive steps to help protect your business and keep your liability insurance working for you:

  1. Review Your Liability Limits
  2. Ask yourself: “Would my current policy cover a major claim or lawsuit?” You may need to increase your limits or consider an umbrella policy.
  3. Improve Risk Management: Invest in employee training, document safety procedures, and regularly inspect your premises to minimize risks.
  4. Document Your Efforts: Keeping a record of safety protocols, training, and risk mitigation can support your case with insurers—and possibly lower premiums.
  5. Start Early: Don’t wait until your policy renews. Starting your insurance review early gives you time to make informed decisions and avoid last-minute surprises.
How Our Agency Can Help You

Navigating today’s complex insurance landscape isn’t something you have to do alone. Our agency partners with business owners every day to help them make confident, informed decisions about their insurance coverage—especially as market conditions continue to evolve.

Liberty Mutual Workplace Safety Index 2025

/in , /by

Men discussing safety

Liberty Mutual has released its latest report on workplace safety, revealing that accidents at work cost U.S. employers around $58.8 billion each year. Remarkably, the most common causes of these injuries account for a staggering 86% of those expenses, totaling about $50.87 billion.

This year marks the 25th anniversary of the report, which highlights the ten main reasons people get seriously hurt at work—specifically, incidents that lead employees to miss more than five days of work. The report ranks these causes based on the medical expenses and lost wages associated with them.

Interestingly, while serious workplace accidents have declined by about 40% over the past 25 years, the overall costs related to workers’ compensation have gone up by 30%. This information comes from credible sources like the Bureau of Labor Statistics and the National Academy of Social Insurance.

The leading cause of workplace injuries remains overexertion, primarily due to heavy lifting and moving materials, which cost about $13.7 billion. This has been the top cause for 25 years. Following that, falls on the same level, such as slipping or tripping, are the second biggest issue, costing approximately $10.5 billion. This highlights the importance of having good safety measures to prevent such accidents.

Other significant causes of workplace injuries include being struck by objects or equipment and falling from heights, both of which add nearly $11.6 billion to the total costs. Additionally, injuries from over-exertion, vehicle-related accidents, and becoming caught in equipment are also major concerns, showing just how varied the risks at work can be.

Interestingly, the costs related to injuries from repetitive tasks have dropped by 44%, suggesting that safety initiatives are effectively reducing these incidents. Another notable mention is injuries from workers being struck by objects or equipment, which add up to about $1.7 billion.

The report also indicates that a large portion—56%—of injuries involving the back, shoulder, knee, or multiple body parts contribute nearly $32.6 billion to overall costs. Seven out of the ten injury causes listed this year have been recurring themes in all 25 reports published.

Accidents can and do occur, but understanding your risks and implementing preventative measures can help reduce their frequency. Cleary Insurance is here to help. Please call us to ensure you are doing everything possible to prevent unforeseen accidents.

Keep in mind that each index is based on data from three years earlier; thus, the findings this year reflect data from 2022.

To read the Liberty Mutual 2025 Workplace Safety Index please click here 2025 workplace Safety Index.

 

Workplace Safety Index – Liberty Mutual Business Insurance

(AI) Artificial Intelligence in Cyber

/in , /by

Over the past year, all eyes have been on the impact of generative artificial intelligence (AI) on cyber insurance. First, the rise of generative AI will likely increase the frequency of cyber attacks. For example, there is a major concern that phishing attacks will become far easier and more effective for determined hackers.

Generative AI has the capability to craft cunning messages without the grammatical flaws that characterize many current phishing attempts. Moreover, generative AI’s data mining capabilities will further amplify these attacks, as the gathering of company-related information will become even easier to mine. Thus, expect more phishing attempts in the future, as generative AI’s ability to produce convincing deepfakes could lead to a rise in social engineering attacks.

For instance, a realistic deepfake of a company’s CEO could be used to deceive an employee into initiating a fraudulent wire transfer. It’s important to note that many of the safeguards that have been effective in the past may no longer be sufficient to counter AI-driven cyber attacks. This underscores the need for updated and robust security measures.

Hackers didn’t want to be left out of all the AI-related hysteria. So, they created a generative AI called WormGPT.

It was a first attempt, and most reports tend to believe that it has been a failure. However, there have been advertisements in hacker forums for machine learning experts to develop better large language models for nefarious purposes, but there could be a constraint on hackers creating AI models, as high-power computing and specialized Nvidia chips are required. Even companies like Google and Facebook are struggling to obtain these chips. So, it may be a while before these malicious models take off.

Ultimately, the most significant impact of generative AI may be a surge in cyber attacks. In light of this uncertain future, it’s imperative for companies to reevaluate their current insurance limits, and this reassessment will help determine whether the existing coverage will be sufficient in the face of a potential increase in claims.

AI Coverages?

Does AI pose any unique coverage-related risks under a cyber policy beyond an increase in claims? At present, most insurers do not appear to believe that there are any specific coverage issues caused by AI. In The Betterley Report’s “Cyber/Privacy Market Survey 2024,” the top cyber insurers were asked the following questions.

  • Any specific coverages related to AI?
  • Any definitions that relate to AI?
  • Any exclusions related to AI?
  • Any risk management services provided to insureds that are related to AI exposures?

Except for one insurer, all either answered these questions “No” or provided no response. Thus, the majority of insurers are simply keeping an eye on AI rather than directly modifying coverage under their policies.

An insurer in the survey, Coalition, took a significant step: It added affirmative AI language to its cyber policy. Specifically, Coalition included an AI security event in its definition of “Security Failure.” It also incorporated fraudulent instructions using deepfakes into its definition of funds transfer fraud.

Not to be outdone, another insurer, Districts Mutual Insurance, filed an endorsement titled Amend Definition of Fraudulent Instruction (Artificial Intelligence). That endorsement states:

The definition of Fraudulent Instruction is deleted in the entirety and replaced with the following:

Fraudulent Instruction means the transfer, payment or delivery of Money or Securities by an Insured as a result of fraudulent written, electronic, telegraphic, cable, teletype or telephone instructions provided by a third party, including any fraudulent instructions resulting from the use of deep fake technology, synthetic media, or any other technology enabled by the use of artificial intelligence, that are intended to mislead an Insured through the misrepresentation of a material fact which is relied upon in good faith by such Insured.

Fraudulent Instruction will not include loss arising out of:

  1. any actual or alleged use of credit, debit, charge, access, convenience, customer identification or other cards;
  2. any transfer involving a third party who is not a natural person Insured, but had authorized access to the Insured’s authentication mechanism;
  3. the processing of, or the failure to process, credit, check, debit, personal identification number debit, electronic benefit transfers or mobile payments for merchant accounts;
  4. accounting or arithmetical errors or omissions, or the failure, malfunction, inadequacy or illegitimacy of any product or service;
  5. any liability to any third party, or any indirect or consequential loss of any kind;
  6. any legal costs or legal expenses; or
  7. proving or establishing the existence of Fraudulent Instruction.

Source: Districts Mutual Insurance, Amend Definition of Fraudulent Instruction (Artificial Intelligence) (DMI—BR E16416 5-24).

It will be interesting to see whether other insurers add similar language to their cyber forms.

Employer of Record and Drones: Two Challenges Employers Face

/in , /by
Commercial owned drones and Employer of Record

As we enter 2025, two common issues have emerged that pose potential coverage problems for an organization’s financial well-being: Employer of Record Agreements and the use of drones.

**EMPLOYER OF RECORD AGREEMENTS** 

More U.S. companies are hiring talent from around the globe, thanks to advancements in technology that simplify communication, expand operational hours, and facilitate talent acquisition. To manage global hiring, organizations often turn to Employer of Record (EOR) services such as Globalization Partners, Oyster HR, and Velocity Global. These EOR organizations handle payroll, taxation, benefits, and local legal compliance for the U.S. entity.

However, an unintended consequence of this arrangement is that an organization might discover it lacks coverage after a loss caused by an EOR employee. Insurance policies typically have clauses that define “Who is an Insured.” While employees are generally considered insureds, policies also specify what constitutes an employee. If a policy’s definition excludes EORs, coverage for losses arising from EOR employment issues will not be available for the U.S. organization or the individual named in a lawsuit.

Furthermore, different policies issued by the same carrier may have varying definitions. For instance, General Liability coverage might include protections that are absent in Professional Liability policies.

When reviewing insurance programs, it is critical to:

  • Identify where the organization has “employees” and determine if any non-U.S. talent falls under an Employer of Record program. If so,
  • Collaborate closely with insurance carriers and underwriters when applying for or amending coverage to ensure that EOR employees are properly covered.

Many organizations, insurance brokers, and carriers may not be aware of this challenge, making it essential to recognize and address it promptly. Please reach out to your Cleary Account Manager to discuss whether EORs are being utilized.

**DRONES** 

Drones are increasingly used in commercial operations, benefiting industries such as roofing, real estate, and insurance adjusting. They allow for safer and more efficient property inspections, often from a distance, which can be beneficial for risk management in Workers’ Compensation.

However, this innovation presents potential challenges for an organization’s General Liability (GL) exposure. GL insurance typically provides coverage for bodily injury and property damage to others. If a drone causes injury or damage, one would generally look to the GL policy for defense and settlement coverage. The complication arises from the GL policy’s list of exclusions, which commonly includes the use of aircraft.

If your organization is using drones, please contact your Cleary Account Manager to discuss the implications for your coverage.

5 Forces Driving Commercial Auto Costs

/in , /by

Over the past decade, auto insurance rates have increased steadily, well exceeding the rate of inflation over the same period. But what’s driving this upward trend? Explore factors that have significantly impacted the rates for commercial auto.

  1. Bodily injury loss costs
    In the five-year period from 2018 to 2022, auto severity has increased a substantial 40% even as frequency has declined.1 Causes include an increase in deadly accidents, rising verdicts in legal cases and medical cost inflation. In fact, the latter is expected to grow 7% in 2024, up from 6.0% in 2023 and 5.5% in 2022.2
  2. Attorney involvement
    With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment.3 A complete fleet management program can help reduce your exposure.
  3. Distractions and impairment
    Distractions behind the wheel, from vehicle infotainment systems and mobile devices to driving under the influence, can lead to significant risks: 30% of companies surveyed reported that they have employees who have been involved in crashes due to mobile phone distraction, and deaths due to preventable crashes are up 18% versus pre-pandemic levels.
  4. Inexperienced drivers
    Resignations and retirements are leading to a shortage of commercial operators, increasing the chance that less experienced replacement drivers are behind the wheel. Operators in new vehicles and covering new routes can also contribute to an increase in accident rates.
  5. Vehicle repair and replacement costs
    Autos have become more expensive to insure and repair. Newer vehicles are outfitted with advanced materials and technology designed to make driving more comfortable and safer. When these vehicles are involved in an accident, costs can be high, and labor shortages and inflation have only exacerbated the issue. In fact, motor vehicle parts and equipment costs have increased almost 24% since September 2019.5 Meanwhile, used car prices are still up almost 47.9% in 2023 compared to the average from 2015 to 2019, despite recent softening.6 This directly impacts the cost of claims in the event of a total loss. Finally, rising auto thefts are further contributing to increased claim costs.

Travelers 5 Forces Driving Commercial Auto Insurance Costs

https://www.travelers.com/resources/business-topics/insuring/commercial-auto-risks-that-can-increase-insurance-rates

Sources
1 LexisNexis Risk Solutions Auto Insurance Trends Report2 Health Research Institute3 Attorney Involvement Keeps Claims Soaring (June 2023, The Institutes)
4 Travelers 2023 Risk Index – Distracted Driving
5 Auto Insurance: The Uncertain Road Ahead (2023, APCIA)6 Edmunds Used Vehicle Report (Q3 2023) 

Commercial Property: Forces Driving Increases

/in /by
Commercial property tall buildings

The commercial property insurance market continues to be challenging, with several factors contributing to premium increases for commercial property coverage:

1. Catastrophe losses

Hurricanes, floods, wildfires, tornadoes, and winter storms are occurring more frequently and with greater severity, causing annual insured losses of more than $100 billion globally in the last four years. In 2023, global insured losses totaled $118 billion, with severe convective storms (SCS) accounting for 58% of the losses globally, and six of the 10 most expensive events in the U.S. being SCS events.

2. Reinsurance

While reinsurance capacity has improved, the cost of available reinsurance capacity remains high due to the impact of catastrophic events, increasing cost of capital, financial market volatility, and inflation. These costs are passed along to customers.

3. Underinsurance

Due to increased material and labor costs, insured property replacement values continue to lag. Only 43% of business owners have increased their policy limits to accurately reflect what it would take to replace insured property.

4. Property Replacement Costs

Nonresidential construction costs have increased by 37% over the past four years, with a 65% increase in fabricated structural steel and a 37% increase in the price of concrete products. Additionally, machinery and equipment costs have increased by 22% over the same period.

5. Skilled Labor Shortage

Wages and salaries, comprising nearly half of construction costs, have increased by 22% over the past four years. However, 77% of contractors are struggling to find skilled labor. These factors may lead to higher rebuilding costs and longer delays, potentially triggering an increase in business interruption losses.

6. Property Rate Needed

Due to escalating loss trends, carriers are expected to raise rates again this year to close the gap between loss trends and rate increases.

In summary, the commercial property insurance market is facing significant challenges, leading to premium increases for commercial property coverage. The increasing frequency and severity of catastrophic events, along with high reinsurance costs and underinsurance due to rising material and labor costs, are key contributing factors. As a result, property replacement costs have surged, and there is a shortage of skilled labor, which may lead to higher rebuilding costs and longer delays. Carriers are expected to raise rates further this year to address the widening gap between loss trends and rate increases.

Read the Travelers Insurance Article: https://www.travelers.com/resources/business-topics/insuring/factors-affect-insurance-costs-commercial-property

6 Forces Driving Commercial Property Insurance Costs

/in , /by
commercial property cost increasing

The market for commercial property insurance continues to be challenging. Here are several factors contributing to premium increases for commercial property coverage.

  1. Catastrophe losses

Hurricanes, floods, wildfires, tornadoes, winter storms. The frequency and severity of major catastrophes continue to stress the industry. In the last four years, these events have caused annual insured losses of more that $100 billion globally.1 In 2023, total insured losses globally were an overwhelming $118 billion.2 Severe convective storms (SCS) represented 58% of the losses globally, and in the U.S., six of the 10 most expensive events were SCS events.3

  1. Reinsurance

Although reinsurance capacity improved in 2023 and into 2024, the cost of available reinsurance capacity remains high. The continued impact of catastrophic events is a major factor driving up costs, along with the increasing cost of capital, financial market volatility and inflation. This is an expense carriers need to pass along to customers.

  1. Underinsurance

After years of increased material and labor costs, insured property replacement values continue to lag.4 Just 43% of business owners say they have increased their policy limits to accurately reflect what it would take to replace insured property now.5 Customers must have accurate valuations for their assets so they don’t come up short after a loss, and premiums will reflect those high values.

  1. Property replacement costs

Led by a 65% increase in fabricated structural steel and a 37% increase in the price of concrete products, nonresidential construction costs remain high with a 37% increase over the past four years.6 Similarly, machinery and equipment costs have increased 22% over the same period. Many contractors continue to struggle with a supply chain that, while better, is still far from pre-pandemic levels.

  1. Skilled labor shortage

Nearly half of construction costs are wages and salaries, and wages have increased 22% over the past four years.7 Even with the higher wages, 77% of contractors are struggling to find skilled labor.8 Higher rebuilding costs and longer delays may trigger an increase in business interruption losses.

  1. Property rate need

For years, escalating loss trends have outpaced rate increases, primarily because of the costs of catastrophes, severe weather and large fires. Expect carriers to raise rates again this year to close the gap.9

6 Forces Driving Commercial Property Insurance Costs | Travelers Insurance

Sources

1 2023: A historic year of U.S. billion-dollar weather and climate disasters

2 Aon

3 Insured nat cat losses hit $123bn in record-setting 2023: Gallagher Re

4 Insurance Information Institute (III)

5 The Harris Poll

6 Bureau of Labor Statistics – 12/2019 – 12/2023 Table 9

7 Bureau of labor statistics, Table B-8B

8 AGC 2024 hiring and business outlook report

9 Commercial property insurance rate hikes come off highs


Winter Losses Are Preventable

/in /by

Before the Storm Starts…

Call your Cleary Insurance representative. Ask how your coverage will help you in a variety of scenarios, including burst pipes, roofing incidents, business interruption, ice dams, or accidents involving company cars. We can work with you to uncover gaps in your coverage and help you develop plans for your greatest risk areas to prevent winter losses.

Building Preparedness

Whether it’s you, an internal team, or a trusted contractor taking care of your building during the storm, make sure you:

  • Know the locations of your water mains and supply lines. Mark them so they can be easily shut down in the event of a burst pipe or structural damage.
  • Get your heating and electrical equipment inspected and in good operating condition. Licensed, insured plumbers and electricians can help you with this before the storm starts.
  • Research or designate fully insured and reliable contractors for snow removal, salting, and sanding of parking areas and walkways. Or, if you choose to self-perform snow removal and maintenance, make sure your staff is properly trained and capable of operating necessary equipment, such as snow blowers. Document the building’s conditions before, during, and after the storm with checklists and photos.
  • Prepare your grounds. Remove any trees or branches that are in danger of falling on your building and note any areas that may become risky in icy or snowy conditions.
  • Check your supplies. Ensure that all snow removal equipment, backup generators, and company vehicles have enough fuel, and that you or your contractors have salt or sand available for your walkways and parking lots. If anyone is staying in your building, keep a well-stocked emergency kit in an accessible area.
  • Consider installing water sensing equipment. Modern water detectors will notify you when your pipes grow cold, or if there is excess moisture present. Some can even shut off your water automatically in an emergency.
  • Consider installing fully programmable and Wi-Fi-enabled thermostats. Today’s thermostats are more accurate, can be adjusted using smart devices, and can even send alerts should internal building temperatures dip to dangerous levels.
  • During the storm, keep all exits, air intake, and exhaust vents clear of snow and ice during and after snow events.
  • Monitor snow accumulation on your roof to prevent potential collapses, especially on flat or low-pitched roofs. If the snow starts piling up, professional roofers can help you keep your roof clean. First and foremost, though, stay safe! Be mindful of wind and weather conditions before asking anyone to work on your roof.

Business Interruption

Storms that cause winter losses become costly when businesses must close for repairs or power restoration. Working with distributors, vendors, suppliers, or even industry counterparts to develop contingency plans can help reduce your business interruption costs. In the past, we’ve seen coordinated efforts—such as co-packing arrangements with competitors and shipping extra product to customers in advance—reduce the impacts of a storm.

Prepare Your People

The key to successful emergency preparedness is communicating with your people to help prevent winter losses. Develop and test emergency communications systems and build redundancies into your methods. Be open and proactive about communicating your inclement weather attendance policy or work from home policies so that no employee feels the need to put themselves in harm’s way. Conduct training sessions on cold exposure and slip and fall safety, as necessary.

Is My Business Covered for That?

/in /by

8 Common Business Insurance Gaps

business insurance

Most small and mid-sized businesses are aware of the importance of having business insurance but often simply opt for general property and liability insurance and call it a day. While these policies cover most of the basics, there may be gaps in your insurance that can leave your business exposed to risk and financial loss.

Here are some of the most common potential gaps we see in business coverage and an overview of more specialized policies and endorsements that may help you protect your business and help your business recover after a covered loss. Keep in mind that individual policies can vary widely, so it’s always important to review your coverage options with your agent or broker.

  1. Am I covered if an employee sues my business? Consult your insurance agent or broker about adding these coverages to help close the potential gaps:
    • Employment Practices Liability Insurance – to protect against lawsuits filed by employees who claim their legal rights as employees have been violated.
    • Directors & Officers – to protect your company’s officers and directors if they are personally sued for acts or omissions committed in their capacity as corporate officers or directors.
  2. Is my business covered if it’s sued by a customer for professional negligence?
    • Consider adding Professional Liability or Errors and Omissions (E&O) insurance to help protect against claims directly related to your professional services.
  3. If my business is damaged by a fire or break-in and must close temporarily, are my operating expenses insured?
    • To help cover that potential gap following a covered property loss, ask your insurance representative about adding business interruption insurance to your property policy.
  4. Am I covered if one of my employees accidently infects my company’s computer system with malware?
    • Consider procuring a commercial cyber policy to help provide solutions and services for privacy breaches, network security, incident response, and media liability.
  5. Is my business insured if our mechanical system breaks down?
    • To help close this potential gap, consider equipment breakdown insurance to provide the funds and resources to get you back up and running quickly after a covered loss.
  6. Is my business covered if an employee gets in an accident while delivering products to a customer?
    • A commercial auto policy can help protect vehicles owned by a business; and some may include coverage for individually owned vehicles used regularly for that business (other than commuting to work).
  7. Is my business covered if it is damaged by a flood?
    • Since the typical commercial property insurance policy does not include flood coverage, ask your agent or broker about commercial flood insurance options available from private insurers or the federal government’s National Flood Insurance Program (NFIP).
  8. Is my business covered if my employees are injured while they are overseas?
    • To help cover this potential gap, consider multinational travel accident insurance – to provide resources for international travel, including emergency medical, cash and document replacement, local country reports and travel alerts, and more.

Regardless of the type of business you run, it may be smart to talk to your independent insurance agent or broker to make sure your business is appropriately insured so that you can focus on keeping your business running smoothly, even if you experience a loss.

Please click here to read the entire document.

This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall’s Mill Road, Whitehouse Station, NJ 08889-1600.