The U.S. economy has transformed dramatically in recent years with significant impacts on the way businesses spend money on general liability insurance.
The country’s manufacturing industry has experienced a decades-long decline. As the service sector has started to slowly pick up, commercial risks facing many American businesses have changed – and thus, the kind of insurance needed has evolved as well.
A recent study of the global insurance market revealed U.S. businesses are spending more than any other country on insurance policies. In fact, the U.S. accounts for 40 percent of the $600 billion commercial insurance industry worldwide.
Within the U.S., the service sector leads the way in money spent on liability insurance as a portion of revenue. According to the study, such businesses pay $4.15 on premiums for every $1,000 of revenue received.
What is causing so many U.S. businesses to seek out general liability insurance policies?
Much of it has to do with the dramatic expansion of the economy’s service sector. According to the report, the services industry has outperformed the manufacturing sector in recent years. Even amid the trouble of government budget issues, as well as a reduction in the amount of disposable income available for the average American worker due to higher payroll tax rates, the service sector has experienced significant growth, a report from Reuters said.
For the majority of this year already, the Institute for Supply Management’s “Non-Manufacturing Business Index” has maintained levels above 50, which Reuters said is the threshold for identifying expansion.
Jobs in the services sector benefit from general liability insurance, as well as errors and omissions plans. Many professionals in this sector of the economy work on a contracting basis that presents unique risks to both workers and employers. With the right plan in place, service sector businesses can continue to expand while avoiding costly damages associated with liability claims.
