Small businesses have been put through the ringer over the past two years, and brokers have been on their toes trying to navigate how to keep clients happy when it comes to their insurance needs.
“The pandemic has not been kind to small businesses, but there are clients in certain segments that have really thrived,” Mark Whiteley, director of commercial lines at Billyard Insurance Group (BIG), told Insurance Business.
Dine-in restaurants and small retailers have pivoted to stay profitable, adding online sales, takeout, and curbside pickup to their business models. Without in-person shopping or dining as an option, consumers have gravitated towards these easily accessible digital models, which has led to a bump in revenue for certain small businesses.
“We’re seeing new businesses pop up, and existing ones staying profitable,” he said. “The main thing our brokers have learned is to not be shy and to ask clients how their experience has been during the pandemic.”
From contractors to retailers, there has been a range of small business clients that have been resilient during the pandemic as their existing client base was strong enough to withstand ongoing lockdowns.
“Many of our clients have already dealt with the initial stress of the pandemic and remained operational for over a year,” Whiteley noted. “We actually had fewer cancellations than we were expecting because our clients pivoted well and kept their businesses running.”
It has become essential for brokers to keep regular tabs on what changes have been made to a client’s business, in order to manage new risks and potential exposures.
“This really accelerated the need for clients to have their shipping in order and to inform brokers about digital updates,” Whiteley said.
With a push towards digital engagement via websites or apps comes an increase in cyber exposure for SME clients.
“One of the first things that we train our brokers to do is check a client’s website,” he said. “If there’s an option to add a product to a shopping cart, there’s a great opportunity to bring up cyber exposures. The good packages out there already include a binding option to make sure nothing is being missed.”
If standard markets for small business were not offering cyber before, they are now as it has become a necessity in a rapidly evolving digital environment.
When it comes to changes in clients’ exposures, cyber is huge but Whiteley also said changes in inventory should also be closely monitored.
“Our brokers really had to pay attention to clients’ revenues, as an increase or decrease in revenue directly impacts business interruption premiums,” he said.
The end of the pandemic may not be in sight, but businesses are still required to keep full coverage in place even if they’re not achieving the same revenues that they generated pre-pandemic.
“In some cases, if clients are scraping the barrel to get by, we adjust the property deductible. With fewer people coming into their store or restaurant, temporarily increasing the deductible allows them to save a few dollars,” Whiteley explained.
When doors do open back up, it’s important for brokers to check-in with clients and ask if revenues are getting back to normal to re-evaluate pricing.
“There’s no perfect scenario but there are some things in a broker’s toolbox that they can use to provide clients some relief,” he said.
With the tough conversations already in the past, and full renewal cycles already undergone by existing clients, the shock of the pandemic has settled as new variants arise.
“When it comes to Omicron,” he said, “it seems like our clients have moved past the pandemic really affecting their business, since they already made the necessary changes to stay afloat during the first and second wave.”
