Navigating Uncertainty: Key Insurance Strategies for 2025
The Challenge: Market Disruptions and Uncertainty
Economic shifts, tariff risks, inflation, and evolving threats like cybercrime and extreme weather continue to create uncertainty for businesses. Without a proactive approach, businesses may face financial risks, coverage gaps, and unexpected premium increases.
Our Approach: Simple, Controllable, and Predictable
At CMB Insurance Brokers, we don’t take a generalist approach—we specialize in helping businesses navigate complex risks with proactive, tailored insurance solutions. Our goal is to ensure your coverage remains relevant, effective, and aligned with your business needs.
We work closely with our clients to:
- Conduct a needs analysis to identify potential exposures
- Brainstorm solutions to mitigate financial risks
- Secure the right coverage for emerging threats
- Stay ahead of challenges with ongoing expert guidance
Key Insurance Best Practices for 2025
1. Tariff Risks & Economic Uncertainty
Businesses are diversifying supply chains, forming strategic partnerships, evaluating merger and acquisition opportunities and increasing domestic production to counter potential trade disruptions. Many of these changes require new insurance considerations:
- Flexible Equipment Policies: adjust premiums mid-term based on usage or parked status
- Business Interruption Insurance: protect against certain types of unexpected disruptions including supply chain
- Trade Disruption Insurance: safeguards against international supply chain interruptions
- Trade Credit Insurance: protect receivables from non-payment
- M&A/Transactional Risk Insurance: mitigates the risks associated with consolidation of companies and their major assets and any potential it may have on their bottom line
Pro Tip: Some business interruption policies may include supply chain endorsements that act as soft extensions but do not fully cover tariff risks. A review with your broker is essential.
2. Inventory Coverage Adjustments
Many businesses are increasing inventory levels to protect against short-term market volatility. This strategy requires:
- Higher coverage for stored goods against fire, water damage, and theft
- Updated policy limits for expanded warehouse space
- Premium financing solutions if capital is tied up in materials
3. Cross-Border Insurance Considerations
With rising material costs, coverage gaps may emerge when transporting goods across borders:
- Cargo coverage should be adjusted to reflect the increased value of materials
- Higher claims costs may impact policy terms—ensure coverage aligns with actual risk
- Auto and home insurance policies may also be affected by cross-border supply chain disruptions
4. Currency Devaluation & Coverage Limits
The Canadian dollar’s fluctuation impacts equipment and replacement costs. To avoid underinsurance:
- Review policy limits to ensure they account for inflation and market value changes
- Adjust coverage for machinery, materials, equipment and fleet insurance as replacement costs rise
5. Market Softening: Are You Overpaying?
Commercial insurance rates declined by 3% in Q3 2024, and this trend may continue in 2025. With inflation easing, now is the time to:
- Reassess your coverage to ensure you are paying the right price for the right protection
- Take advantage of improving market conditions with a thorough policy review and marketing strategy
6. Extreme Weather & Disaster Preparedness
With 2025 recording the highest insured losses from natural disasters, businesses should:
- Ensure weather-related endorsements are included in policies
- Conduct a climate risk assessment to identify vulnerabilities
Update disaster recovery plans and verify coverage for property damage, business interruption, and equipment replacement
7. Cyber Risks: Evolving Threats in 2025
AI-driven cybercrime is on the rise, increasing the risk of data breaches and financial losses. Businesses should:
- Review and update cyber insurance policies
- Ensure coverage includes ransomware attacks, data restoration, and business interruption
- Implement enhanced cybersecurity measures to meet evolving insurer requirements
Let’s work together to ensure your business is protected, cost-efficient, and prepared for whatever 2025 brings. Contact us today to review your insurance strategy and optimize your coverage.