Insurance and inflation: How rising costs affect small business protection. biBerk Business Insurance offers insights.<div style="float:right;padding:0 0 15px 20px;margin:15px 0 20px 20px;width:300px">
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</div>Omaha, Nebraska, Sept. 16, 2026 <a href="https://www.globenewswire.com" target="_blank">(GLOBE NEWSWIRE)</a> -- Even the most well-run small businesses can face financial challenges. Whether it’s continually attracting new customers or dealing with supply chain issues, it takes consistent focus and hard work to stay profitable. One of the biggest issues confronting small businesses today is inflation. Even when the inflation rate isn’t currently high, a change may be right around the corner. Consequently, as a business owner, you likely have an in-depth understanding of how a changing economic climate affects your operations. But have you considered the relationship between <a href="https://www.globenewswire.com/Tracker?data=6rFMz0TOMbDyRPlBZyQEoJ10jHzKrEX2NmYWZcTVkjORCCpzqMpkYyDgJ_LDh71J3vSombBQOcmUqsJCQsrPptHJDESQa8EOl_dRudyDoBggRxevgHPjWYMfgbed3NoV" rel="nofollow" target="_blank" title="insurance">insurance</a> and inflation? Issues like the risk of being unintentionally underinsured and the impact of inflation on insurance premiums are things every small business owner should be aware of. This biBerk article provides insights into how a key economic indicator can affect financial protection for small businesses. <a href="https://www.globenewswire.com/Tracker?data=RUtL5VHS4MfDnXbLNQzWBGnGOqp6N-0MNgmRrFa0zUdpegn8ChVmu5ySKu9mV5kvpB9rymzOVQYzlUveg-GyQwWrqaC6vqmeAtredNL2WUvkzH_ZSq-kBNG0bpcrFpVl" rel="nofollow" target="_blank" title=""><img alt="Man uses laptop and sits at a table." src="https://newsroom.submitmypressrelease.com/system/media_files/images/000/075/403/original_jpeg/biBerk_September.jpg" /></a> The connection between inflation and insurance. How exactly does <a href="https://www.globenewswire.com/Tracker?data=H3EGQo376F-AaREBUr6I3T5LjD5ai8B0nya_cWke29G-CbiLsRYbz4NQgbYZXigdIzwuN9p2f1qCxdc-vuyMFQbg6Qs9TwkiudYk3iRmS-TuE6qtNnRwv4p6e6sCBfEJ" rel="nofollow" target="_blank" title="inflation">inflation</a> affect your business insurance coverage? The most direct connection is that insurance is designed to address issues like damage to your company’s property or owned/leased space. If an incident occurs, your insurance can cover the cost of repairs or replacement. However, if those costs increase due to economic factors, that’s where the issue of insurance vs. inflation comes into play. As inflation rises, so does the cost of virtually everything—lumber used in structural repairs, parts used to repair vehicles, etc. Service providers may also increase their labor costs. As a result, a repair that might have cost $3,000 before a significant increase in inflation might cost $4,000 in the new economic scenario. To cover this increase, business insurance companies may have to increase their rates. This is a direct impact of inflation on insurance premiums. Understanding the relationship between insurance and the inflation rate is crucial for business owners. Inflation and insurance: the danger of being accidentally underinsured. No business should ever risk its financial future by being uninsured, but rapidly changing economic conditions can lead to a company being underinsured. The financial impact of that scenario may be less than having no insurance, but it can still be a costly mistake. Let's say you bought a <a href="https://www.globenewswire.com/Tracker?data=i9R6cI_aEKoMv4kaLOg8ilAnaZ5rDCp4OioJuIldBYYYhk6HgSh8zRESBgsTqh8c3aKrnB3jRUThgEOrXqVJh95yiw0gOP4b4eW2gBHOpnuT9b-pTLdL9TiFd8k_q3_83xg3kl_0rSOzAfvPNvK_lBKLf7Pks5SWxKM7XcUiliM=" rel="nofollow" target="_blank" title="Business Owners Policy (BOP)">Business Owners Policy (BOP)</a> when the inflation rate was low, and the policy’s stated property value limit was sufficient to cover the replacement cost for your building at that time. Then, a significant rise in inflation drives up construction costs. As a result, the property limit on your policy will likely not cover the full cost of a rebuild today. If you suffer a total loss, you could find yourself facing a large gap between what your insurance pays and what it actually costs to rebuild and get your business back up and running. Consequently, it’s crucial to review your coverage annually to determine if your limits should be increased for inflationary reasons. Adding to this problem is the fact that, as the cost of doing business rises, owners understandably look for ways to cut expenses, and some think that canceling their business insurance is a good option. The elimination of an insurance premium might be enticing, but it creates an enormous financial risk for the business. In fact, it’s an approach that can push a company into bankruptcy as a result of a catastrophic loss. Even in the face of skyrocketing inflation, insurance is essential. Some policies may have an endorsement known as “inflation guard.” It automatically increases your coverage limits during the policy term in order to keep pace with inflation. Carriers may also automatically increase your values at renewal. However, it’s important to confirm this. You should also be aware of what’s called a “coinsurance provision” in an insurance policy. It requires you to insure your property for a specified percentage of its total replacement value (for example, 80%). If your coverage limit is below that figure when an incident occurs, you will face a coinsurance penalty that is applied to the loss. Inflation and small business insurance premiums: real-world examples. Wondering about the relationship between inflation and specific small business insurance premiums? Here are some examples of how it can affect some common types of small business coverage: Property insurance. As noted above, the link between inflation and insurance premiums is very direct here. The cost to rebuild or repair your property can increase significantly as economic conditions change, making it essential to review your coverage limits regularly.  Commercial Auto insurance. Inflation can impact the cost of everything from engine parts to body panels. Consequently, even a minor accident can result in an expensive repair, and that reality can drive up the cost of Commercial Auto insurance.  General Liability Insurance. Rising inflation can also affect liability claims. For instance, the cost of medical care tends to rise with inflation. If a visitor suffers an injury on your property, the cost of their medical treatment will likely be higher than it would have been a few years ago, especially if the economy has recently experienced inflationary pressure. If they sue you over the incident, you may face larger settlements and judgments, making adequate liability coverage more important than ever. Consequently, if you haven’t reviewed your policy in some time, you should do so and consider increasing your liability limits.  Workers' Compensation insurance. The cost of medical care for your injured workers also rises with inflation. Additionally, as wages increase with inflation, so does the cost of lost wage benefits. This all contributes to higher insurance premiums. What can business owners do about insurance and inflation?  Even with rising inflation, the protection insurance provides is crucial. So, if you should not forgo insurance or even reduce your coverage, what can you do to safeguard your company’s finances? There are several actions you should consider. First and foremost, it’s crucial to review your business insurance policies regularly. Securing coverage shouldn’t be a “set it and forget it” kind of thing. Regular reviews of your coverage as compared to related claim costs can help you determine if your policy limits are still adequate. And if you ever have questions or concerns, biBerk’s licensed insurance experts can address them. Also, in the face of rising business costs, risk management becomes even more important. You can't control the economy, but you can take steps to reduce the likelihood of claims in the first place. Actions can include creating or enhancing a safety program for your employees, installing a security system, and conducting regular property and equipment assessments to identify issues so you can address them promptly and avoid incidents. The fewer claims you have, the lower your small business insurance premiums will be over the long term. Insurance and inflation: another reason to stay engaged with your provider. Whether inflation is spiking or holding steady, it’s good to get your business insurance coverage from a <a href="https://www.globenewswire.com/Tracker?data=Dwr1GOpVBvBfVOGO8zDo_l6n3XcTxtAueUft1wL9wAt4p1eoISsy5qTgchxdQMyKv_Gab0RdGpTEAXjvkxHMPk7SXY8t-VVyUK1N1xsFIWtpb0w_68qTst7C5Tb-SXmY" rel="nofollow" target="_blank" title="trustworthy provider">trustworthy provider</a> and then stay engaged with them. biBerk customers appreciate our <a href="https://www.globenewswire.com/Tracker?data=p2QdzDmSeKs7SfcXbsDO-C5O2FW0kmI46WckzGqBZZM83KGRNppEpLKP1EzR_dmNfV5bsUX221OQ_eVXwUY6tdoXHl-xrTTDBiPexb76IFZNYhgp3y6EOeSlMSWv4HpS" rel="nofollow" target="_blank" title="attentive customer support">attentive customer support</a> and guidance on understanding and addressing their business insurance needs. That’s especially true in times of economic uncertainty. However, you might also need to modify your financial protection as a result of positive changes in your business. Increasing headcount, new property acquisitions, and other factors might require higher limits or new types of coverage. Ultimately, whatever challenges or opportunities your business faces, we’re here to help! This information is provided for general informational purposes only and is not intended as insurance, legal, or financial advice. Insurance coverage, limits, exclusions, and requirements vary by policy and individual circumstances. Business owners should review their specific coverage needs with a licensed insurance professional. <hr /> About biBerk Business Insurance biBerk is a Berkshire Hathaway company offering small business insurance underwritten by A++ AM Best-rated Berkshire Hathaway insurance carriers. <a href="https://www.globenewswire.com/Tracker?data=WSIDVhvAXUUhoUe-Vz7c3E_mY1vt0M99GHmfSYuB9YjGyu-f5JCoDf27DCAn0qPU1xhffepVjlF-VsfAhG-H5o40m95-PQgy5SIZp9M45pE=" rel="nofollow" target="_blank" title="">https://www.biberk.com</a> Media Contact: Rakesh Gupta | 402-408-2870 
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biBerk Business Insurance Offers Guidance on How Business Owners Can Navigate Insurance and Inflation, Avoid the Risk of Being Accidentally Underinsured, and Learn From Real-World Examples

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