While insurance premiums for the protection of professionals had seen a marked improvement in 2002, the Covid 19 health crisis reversed the situation. In 2021, there was a freeze on the amount of premiums for many professional sectors. A measure that will have an undeniable impact on companies, SMEs and even the self-employed. In addition to the fall in their turnover, many companies are now facing a surge in insurance premiums, crowned by a reduction in guarantees.
“In 2021, there was a freeze on the amount of premiums for many professional sectors.”
The change in contract terms is certain. Insurance companies are charging higher costs and companies must come to terms with it. All sectors of activity are affected by this increase. Premiums increased by around 5 to 30% in January 2021, for the same guarantees. The government has also set up a coverage agreement to protect the sectors most affected by the crisis. These are catering, sports, culture, tourism and tourism events. The measure will mainly cover companies with fewer than 250 employees.
Although this news was very badly received by insurers who then denounced blackmail on the part of the authorities, it will allow the companies concerned to better recover in this crisis situation. In addition to the increase in premiums, some companies are being harmed by their insurers who have decided to remove the epidemic guarantee.
In January 2021, many companies had to renew their insurance contracts. In most cases, there have been changes to the terms and the removal of certain guarantees. In particular, we have observed the removal of the epidemic guarantee, the guarantee in the event of administrative closure linked to the pandemic, etc. From now on, insurers no longer cover SMEs in the event of operating losses without damage. In the event of a strike or other demonstration, for example, some insurers will not cover the losses incurred.
Furthermore, some insurance companies continue to cover this risk, but for this, the premium to be paid will be around 50%. A situation that will strongly impact the economic situation of companies.
The explosion in insurance premiums has led to changes in the economic market. Coverage is declining, while operating guarantee premiums are increasing. That said, for cases of incidents at work, fire, flood, the company will have to pay up to 30% more.
Entrepreneurs must now pay a high price to benefit from complete coverage. But a major constraint arises at the level of budgets that do not allow for excessive spending. Managers could therefore opt for a reduction in their guarantees in order to maintain the cost of their insurance. Which in itself is a high-risk decision, because in the event of a disaster, the losses and damages will be entirely the responsibility of the company.
