This article summarizes key findings from the whitepaper "2025 commercial insurance trends and how to navigate them." For comprehensive insights and actionable tips, click here to download the full whitepaper.

The insurance industry has seen a number of changes with increased rates, increased deductibles or even insurability over the past year. This isn’t because insurance companies are taking more than their fair share—it’s because risk levels have gotten substantially higher.

As we begin 2025, it’s important to have a perspective on some of the trends that have caused insurance rates to change so much. Here’s a closer look:

Weather-related disasters and catastrophes

Weather disasters—including hurricanes, wildfires, tornadoes and floods—are currently exceeding expected probability models. This means insurance companies are having to pay much more in claims than they were anticipating, which leads to higher premiums.

While you can’t change the weather, you can prepare for it:

• Conduct risk assessments and understand the potential impact of weather on your organization.
• Create a comprehensive emergency plan that will help you minimize disruption during a disaster.
• Strengthen your building’s existing structure.

Social inflation and nuclear verdicts

Social inflation is a term that refers to how insurance companies’ claims are increasing above general economic inflation. This occurs when plaintiffs seek—and receive—large amounts for their injuries in lawsuits, sometimes referred to as “nuclear verdicts.”

As an organization, you should adopt risk management strategies that mitigate the financial impact of potential lawsuits. You should:

• Retain legal counsel to identify potential liabilities and reduce your exposure to risk.
• Educate your employees and volunteers on ways they can avoid actions that lead to litigation.
• Adopt multiple risk management strategies throughout your organization.

Increased cost of building supplies

There has been a 19% average increase in building supply costs since 2020, which has led to both increases in overall building costs and in insurance premiums. In particular, prices for materials like steel, concrete and lumber have remained significantly higher than pre-pandemic levels.

To navigate these challenges, you will need to:

• Plan for higher costs for construction and repair projects in your facility.
• Seek cost-effective and sustainable building materials, such as recycled or locally sourced products. These may offer both cost savings and environmental benefit.
• Work with your insurer to adjust your coverage limits. If it costs more to replace your building, you need more insurance coverage. If you don’t regularly review your policy, you may find yourself in for an unpleasant surprise if you file a claim.

Aging infrastructures and insurance problems

If your organization is among the many with an aging building, you know just how frustrating it is when something always seems to be breaking. In particular, many houses of worship are requiring costly updates to remain insurable—80% of religious congregations need maintenance upgrades.

To stay on top of your facility’s needs, you can:

• Conduct regular inspections to identify and address issues early.
• Apply for funding opportunities, such as energy efficiency grants, to help pay for necessary upgrades.
• Prioritize critical repairs that impact insurability and safety.

Cybersecurity risks

Since the COVID-19 pandemic and shutdown, the public has been clamoring for more online offerings—and organizations are providing them. However, having an online presence puts you more at risk for cybercrime. The projected cost of global cybercrime is expected to reach $12 trillion by 2025.

To safeguard your organization and people’s data, you should:

• Invest in cybersecurity, such as security software, firewalls and encryption technologies.
• Train your staff members and volunteers on how to stay safe when working online. In particular, they should know how to recognize phishing attempts and create strong passwords.
• Adopt a zero-trust approach to enhancing security across your organization. This model requires verification for every access request.

Perhaps most importantly, you can work closely with your insurance company to identify specific, actionable ways to lower your risk and potentially decrease your costs. For more information about how Church Mutual can help you manage risk, visit churchmutual.com/resources.

For a deeper dive into the analysis and strategies presented in this article, click here to download the full whitepaper “2025 commercial insurance trends and how to navigate them.”