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What are Examples of Commercial Insurance

A favorable line for agents

Last Updated: 28 Jan, 2022

In 2019 a research was conducted by Insurance Information Institute (III). Based on the findings, the direct premium of property and casualty insurance (P&C) increased by 5.2% faster than the economic growth rate of 4.1% in the same year. It can be an opportunity for most people to turn their carrier path towards exploring the landscape of the P&C insurance industry. Talking about the Landscape, it’s divided into two parts; Personal Insurance and Commercial Insurance . It’s always an excellent choice to go after commercial insurance. If you want to know what are examples of commercial insurance then read ahead.

What are examples of commercial insurance?

The difference is personal insurance provides coverage against the claims for personal losses due to injury, accident, or property damage. In contrast, commercial insurance provides coverage for varied business protection needs. 

what are examples of commercial insurance
commercial insurance
commercial insurance

Why is it Better?

Personal Insurance may have been the golden child in the past, but the table has started to turn now. In 2018, the Net Premium Written (NPW) for personal line amounted to $329.8 billion, compared to $287.1 billion for the commercial line. Commercial insurance is trending these days among your targeted prospects. Hence, when the customers want to find an agent then you can leverage your experience in commercial insurance to top the search.

However, in 2020, the NPW for the commercial line has a growth rate of 12.1 percent compared to personal line’s 3.0 percent growth rate. The data reflects a dynamic shift in the P&C Insurance market. As an insurance agent or an insurance broker, you should give a thought about this shift in the P&C industry.

According to U.S Small Business Administration (SBA), as of May 2020, the total number of small businesses was 31.7 million. Regardless of the companies’ nature or size, without proper and adequate insurance coverage, the business can quickly shut down under the pressure of a disaster or a lawsuit.

Here are a few points to represent Commercial Insurance over Personal Insurance:  

1. Commercial Insurance has a high commission payout:

The policy limit for commercial line insurance is higher than the policy limit for personal line insurance. This means you have the chance to earn more in commercial insurance because the higher the policy limits, the higher you earn your commission. There is high independent insurance agency profit margin if you own it.

2. The diversified commercial insurance:

With diversification in the market, new business trends have emerged to fulfill the market requirements. These New businesses also bring new opportunities for the insurance industry to develop new niches like ridesharing insurance and proliferate. This creates more opportunity in commercial insurance in comparison with personal insurance for an insurance brokerage to tap in. 

3. Rising commercial insurance rate:

The insurance rate for commercial insurance in Boston has been increasing since the first quarter of 2020. The peak rate recorded was for Financial and Professional Liability policies by 23% and Directors and Officers (D&0) insurance by 44%. The more the rate goes up, the more commission on the policy, which is beneficial for an insurance agent.  

4. Growth of insurance technology:

With growing technological use by many businesses, cybercrimes have also boosted during the past years. In 2018 the average loss due to cyber-attacks amounted to 27.37 million in the U.S. During that time, only 34 percent of companies had cyber-insurance offered to the clients developing a potential market to tap into cyber insurance

 

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