Category: Insurance

Everyone likes to save money whenever and wherever possible. Just because insurance is crucial for your law firm, it doesn’t mean it has to become a financial burden — in fact, finding cheap business insurance is possible, even for lawyers.

Like any other business expense, insurance costs can add up over time and may even change, which can put a strain on your budget. Fortunately, there are effective ways to manage insurance costs, without compromising essential protection from costly malpractice claims.

In the long run, operating without proper coverage can lead to financial consequences far exceeding any policy premium. Smart insurance shopping helps you balance affordability with comprehensive protection.

Do lawyers need to have legal malpractice insurance?

We all make mistakes. After all, “to err is human.” Even the most diligent and experienced attorneys can’t fully avoid the risk of a malpractice claim. 

What’s more, a disgruntled client could file a complaint even if it’s unfounded. Say a client doesn’t like the results of a court case, and they blame their lawyer’s actions for the outcome. That client then attempts to recoup their losses by filing a malpractice lawsuit against their attorney. It’s a familiar tale for any lawyer.

That’s why legal malpractice coverage is essential — it protects you from the unexpected. So, the answer to the question “Do lawyers need to have legal malpractice insurance?” is yes, absolutely, 100%, no question.

For those who choose to forgo malpractice insurance, a lawsuit could wipe out any savings and ruin the sustainability of a practice.

That said, it’s easy to understand why some, particularly smaller firms and solo practitioners, might question the value of paying for legal malpractice insurance, especially if they’ve never had to file a claim. 

Rather than deciding against insurance, a better option is to look for cost-effective solutions, with cheap business insurance that doesn’t compromise protection. Would you stop paying the rent if the lease for your firm’s office space increased? Of course not, but you would probably start looking for a new office space that’s more affordable. The same goes for legal malpractice insurance. 

What affects the cost of insurance for lawyers?

Every law firm is different, which is why there are many factors that can impact how much lawyers pay for insurance. Here’s a look at some of the main factors that can affect the cost of insurance for lawyers.

Location

Every state is assigned a minimum premium requirement per attorney by insurers. Even the county or city you’re located in could also affect your premium — if insurers notice that a majority of claims are coming from a particular place, they can increase rates for that county to make up for losses without increasing premiums on a state level. That’s why firms located in larger cities, like New York City, Los Angeles, or Boston, will pay higher insurance premiums than those in less populated areas.

Firm size

The size of your law practice has a significant impact on how much you’ll pay for insurance. In short, the more lawyers you have, the more you’ll need to spend to insure them all. Plus, the type of lawyers on staff at your practice — contract and part-time versus full-time — can influence your insurance costs.

Areas of practice

The legal fields that your firm practices in can significantly influence insurance costs. That’s because some areas of practice are known to attract more claims, making them riskier than others. In recent years, three practice areas — trusts and estates, business transactions, and corporate and securities — have experienced the most malpractice claims. Plaintiff’s personal injury and intellectual property are also known to be riskier areas of practice. Lawyers in any of these fields often see higher premiums.

Claims history

No surprise with this one. A law firm with multiple past claims will pay more for insurance than a firm that has never filed a claim. Claims are common with lawyers; in fact, four out of five lawyers can expect to get sued for malpractice at some point in their career. An insurer won’t be surprised if you’ve had a claim in the past, so be transparent and provide as many details about the matter as possible.

Years of experience

How long a lawyer has been practicing can affect insurance rates. Insurers use a “step rating” system to determine legal malpractice premiums. It’s based on the length of time a lawyer has spent with the firm. Because of this, many insurers offer lower premiums to new attorneys (step one). Experienced lawyers and larger firms are more vulnerable to claims due to their cases’ complexity and longer legal work history. 

Policy limits

The higher your policy limits, the higher the premiums. Determining policy limits should be based on various factors, such as the value of your assets, the amount of risk you’re willing to take, and, of course, your budget. Working with an experienced insurance agent or broker will help ensure you have sufficient coverage to meet your needs.

How evaluating risks can help save on insurance for lawyers

Whether you work as a solo attorney or are part of a growing firm, every law practice faces risks like cyberattacks and allegations of negligence. Identifying and understanding the risks your law firm could encounter is the first step in decreasing your liability exposure, which directly impacts insurance costs.

Implementing risk management best practices is critical for lawyers to understand and mitigate threats that could potentially harm their practice. 

Every law firm should have a process to identify risks — in day-to-day operations, cybersecurity, etc. — and evaluate threat levels and occurrence potential. Once risks have been assessed and evaluated, you can decide how to deal with them, which may involve avoidance techniques, risk reduction strategies, or risk transfer with insurance.

Below is an overview of some common risks for law firms. For more detailed information on the challenges that law firms face and how to protect against them, read our comprehensive guide on law firm risk management.

High-risk areas of practice

As mentioned, some areas of practice have a higher level of risk due to the nature of the cases involved and are associated with more malpractice claims than other legal fields. When deciding how much risk exposure you’re comfortable with, carefully consider your practice areas and how much time you want to dedicate to riskier fields.

Client data

Every lawyer holds a treasure trove of confidential information, from trade secrets and medical records, to intellectual property and skeletons in the closet that people would rather not have exposed. So, it’s no surprise that cybercriminals frequently target law firms.

According to a 2023 survey by the American Bar Association (ABA), 29% of law firms said they had experienced a security breach, while 19% reported not knowing if one had occurred. 

When it comes to client data, lawyers have regulatory and ethical obligations. Under the ABA Rule 1.6 Confidentiality of Information, attorneys must make reasonable efforts to detect breaches and avoid client data loss. Failing to do so can result in an ethical violation and costly lawsuit.

There’s no shortage of firms that have dealt with lawsuits for failing to protect client data, which underscores the need for all law practices to take cybersecurity seriously — and consider getting cyber insurance — before it’s too late. For more information, read our complete guide on data security for law firms.

Recruitment and retention

Embroker’s 2024 Legal Risk Index found that many law firms struggle with finding and keeping experienced attorneys, with 50% of those surveyed reporting they faced employee retention challenges in 2023.

How does recruitment and retention come into play with insurance? If your firm’s caseload becomes too much or exceeds the expertise of the attorneys available, that’s a surefire recipe for mistakes and errors to come up. And that means the risk of a claim goes up, which means your insurance costs go up.

Creating a hiring plan, introducing unique employee benefits, networking, and exploring remote or hybrid work options can help you find and keep talented individuals.

Technology

There’s a lot for lawyers to get excited about when it comes to new tech tools. McKinsey Global Institute estimates that technology could automate 23% of an attorney’s workload. And according to Thomson Reuters’ Future of Professionals Report, AI use could free up nearly 200 hours per lawyer in 2025, which translates to approximately $100,000 in new billable time per attorney annually.

More and more lawyers are turning to AI for research, document review, drafting standard documents, and case analysis. Some even think that in the not-so-distant future, not using AI may be considered grounds for legal malpractice claims.

However, adopting AI without oversight can lead to problems. There are plenty of lawyers who have faced repercussions for submitting filings containing information that generative AI programs made up. Recently, three lawyers involved in a personal injury lawsuit against Walmart were ordered to pay fines for citing fake cases generated by AI. A lawyer in Canada who allegedly submitted fake case law that ChatGPT fabricated was sued by the opposing counsel for the time they wasted going through the false information.

Generative AI is well-known for making up stuff, known as “hallucinations.” In its Formal Opinion 512 on generative AI, the ABA indicated that “even an unintentional misstatement to a court can involve misrepresentation.”  

AI use also brings the risk of a potential breach of confidentiality. Using a program that retains data (particularly if a third party has access to that information) is risky for lawyers.

We definitely don’t want to scare anyone off from maximizing the opportunities that AI tools offer. But making the most of those opportunities requires due diligence. Law firms using AI tools should establish clear policies regarding the permissible use of AI, including a review process for any AI-generated materials. 

How lawyers can keep the cost of insurance down

Understanding the risks associated with your practice and how to mitigate them, can help you save on insurance costs. Because with a bit of strategizing and planning, there are ways to lower insurance costs while still getting the appropriate coverage to protect your practice. And who doesn’t like saving money? 

Reduce high-risk practice areas

To lessen the cost of insurance, avoid submitting inflated hours or revenue for high-risk areas. But — and we can’t stress this enough — it’s important to be truthful. Downplaying or outright lying about your practice areas can cost you more in the long run if coverage for a claim is denied because of omitted information.

If you only do a small amount of business in a high-risk field, it may be worth weighing the financial impact of eliminating that work from your practice. 

For those working in high-risk practice areas, provide your insurer with a breakdown of the nature of your work in these fields.

Identify any part-time lawyers

If you’re not a solo practitioner, you’ll need to provide an overview of the types of lawyers employed at your firm. Identifying lawyers working part-time at your firm is important, as that can bring insurance cost savings. Even if your insurer doesn’t ask for specifics regarding who works at your practice, providing details about your firm’s roster can be advantageous.

Prioritize risk management 

Want to know a tried-and-true method for lowering insurance costs? Prioritize risk management. Proactive risk management not only helps mitigate losses, but also protects your firm’s reputation, financial stability, and competitive advantage. It just makes good business sense. 

The more risks your practice is exposed to, the more you will pay for insurance. Effective internal controls, such as case management software and systems for identifying conflicts of interest, can significantly reduce your firm’s risk exposure and insurance costs.

Keep in mind that risk management isn’t a once-and-done process. After you have a risk management plan in place, it’s crucial to regularly review it to ensure things are still relevant and effective. Because as your practice changes, so too will your risks.

If you’re unsure how to get the ball rolling with risk management, check out our guide on conducting a law firm risk assessment. 

Pay in advance

If you can afford it, paying your annual insurance premium in one lump payment can bring savings, as it eliminates the financing fees associated with paying in monthly installments.

Don’t overbuy coverage

It’s essential to consider how much coverage your firm actually needs. Buying the most extensive and expensive insurance package may seem like an easy way to ensure protection from claims. But if your law firm doesn’t require elaborate malpractice coverage, then it doesn’t provide any additional benefit. Having unnecessary coverage just means unnecessary spending. 

Raise deductibles

While a higher deductible can lower your upfront insurance costs, it means paying more out-of-pocket when you file a claim. 

Because of this risk, raising your deductible should be a last resort for saving money on insurance. If you do opt for this tactic, make sure you choose an amount that you can comfortably afford to pay.

Review policies annually

Reviewing coverage every year is something every business should do, law firms included. As your law practice changes, your insurance needs will also change. Keeping your insurance broker or agent informed about those changes can go a long way in helping save on insurance costs.

Compare quotes and insurers

Before selecting an insurance broker or agent, compare quotes from a few different insurers. With Embroker, getting an online quote only takes a few short steps.

While cost is an understandable consideration when shopping for insurance, it shouldn’t be the only factor. Working with an experienced business insurance broker, like Embroker, means you get an expert advisor who works on behalf of your firm to get the best rate available without compromising coverage.

It’s normal to have costs in mind when shopping for insurance. Just don’t forget to keep your law practice’s unique needs in the mix along with your budget. While it’s beneficial to save when possible, don’t let that jeopardize your practice by not being properly protected for whatever comes your way. 

After all, skipping out on insurance will end up costing you way more than any premium.

The insurance industry faces major changes in 2025. Demographics, climate impacts and geopolitical change are shifting the landscape—literally and figuratively—and will push insurers to adapt. Faced with new opportunities and risks we expect the industry to challenge orthodoxies and spark reinvention. 

1. The aging population becomes the dominant industry force.

Longer life spans and lower fertility rates are projected to push the global median age to 32 in 2025—up from 30.9 in 2020. But what constitutes “retirement age” is shifting with other traditional milestones, such as marriage and homeownership. 

There is greater diversity in lifestyles and aspirations. As people age, insurers will find new opportunities to innovate and tailor health, life and hybrid retirement offerings that address the longevity risk and complex needs of older adults. 

This innovation will become a matter of urgency for Gen X with its oldest members turning 60 in 2025 and many unprepared for it compared to other generational cohorts. In the US for example, 48% of Gen Xers say they have done no retirement planning—7 points higher than Millennials. Retirement services becomes a strategic priority for the industry as carriers reinvent how to serve this economically powerful segment. 

More retirees than the world has ever seen is a challenge that goes well beyond this year and this industry. It creates interconnected risks as healthcare providers, governments and communities struggle to scale up services for the elderly in a competitive labor market. 

2. Property insurance creates an existential crisis.

Personal and Commercial property makes up approximately 30% of global P&C premiums and has fueled top line growth with strong rate growth in recent years. This rising tide has waned as increasing claims from catastrophic events linked to climate change push many insurers, reinsurers and even the public “insurers of last resort” to exit the segment. 

The devastating start to 2025 in southern California is the latest reminder of the impacts catastrophic events can have on people’s lives and communities. Growing awareness will continue to spur action.  

Regulatory changes like those in California and in Italy are a start, but systemic solutions that address pricing as well as resilience at the community level are necessary. In 2025, we expect to see more public-private partnerships aimed at increasing climate resilience in the communities most affected. 

3. Instability drives insurers to focus on what they can control—cost.

In an uncertain geopolitical world that will drive volatility into the macroeconomic environment (e.g. interest rates, supply chains, multinational commerce), insurers will turn to what they know and what they can control. Costs are knowable. To the extent they are controllable, that is where insurers will look to improve combined ratios. 

4. AI is the new talent segment that reshapes talent strategies.

AI is now in your business and being used by your workforce to drive efficiency and make more effective decisions. In 2025, insurers will focus on sourcing skills needed to scale AI across market facing and corporate functions. 

The historical apprenticeship-based career path has been disrupted by AI. Insurers will take new approaches to talent sourcing and development, including looking well beyond their own walls for expertise and capacity for the full spectrum of low to high domain expertise roles.   

5. Pricing of legacy tech ends “kick the can” for CIOs.

Carriers and CIOs hoping to get a few more years out of their legacy technology by delaying resource-intensive technology modernization will find they are kicking that can down a toll road.  The industry will see more of the dramatic price increases for legacy technology (a la VMWare). The risk and economics of modernization will fundamentally change in 2025, forcing the industry to take (much delayed) action. 

We remain optimistic. 

Four years ago, we published our Revenue Landscape 2025 report in which we predicted global insurance industry revenues would grow to $7.5 trillion by the end of 2025. Based on current forecasts the industry is on course to exceed that with a worldwide total premium volume of $7.7 trillion by the end of the year. Whether that premium growth translates to profitable growth will be our collective challenge.  

We believe the industry will embrace the challenges of 2025 to reinvent—and we look forward to being at the heart of that reinvention. 

This post is part of a series sponsored by AgentSync.

The reality of today’s insurance landscape: Speed is king.

One lead-response vendor study said 78 percent of sales go to the first vendor to respond to a lead. And speed has a positive correlation with insurance business sales, customer retention rate, and referrals.

For insurance carriers and agencies, interactions with policyholders depend on your speed to quote, bind, and pay claims for retention. Speed is also vital in the less-visible parts of your business, where producers and other distribution channel partners decide which carriers to represent and quote coverage for.

Yet, insurers and agencies know they can’t move so quick that they cut corners with compliance. So, how do you balance your need for speed with the knowledge that maintaining accuracy is paramount for producers and customers?

The clear and obvious answer is to be proactive in taking a digital, technology-first approach to your producer onboarding, compliance, and distribution channel management processes. But not all tech solutions are the same.

Hierarchy management: A hidden superpower

Most producer compliance and distribution channel management systems have some element of data synchronization with the industry source of truth, some contracting components, and integrations with other systems (although we will certainly still argue that our versions of these things are a cut above the rest). However, most solutions in the market aren’t handling hierarchies well. Why is hierarchy management, of all things, worth the tech investment?

Ultimately, it comes down to pairing speed with trust. Move fast and break things might work fine for Silicon Valley companies, but insurers and insurance agencies can’t afford to break things, whether it’s thanks to regulators or thanks to the sheer reputational risk with their partners and consumers. But the drumbeat of progress demands that insurers and their partners deliver at scale and at speed.

Without robust hierarchy management, moving at speed with your distribution partners poses many risks.

Why hierarchies matter—a nonhypothetical

Before you prematurely dismiss the following risks, know that these aren’t just a thought exercise. One AgentSync partner revealed more than 4,200 unique business entities in their hierarchy. After being able to match up the different partnerships and business relationships in their system, they saw about 20 entities were responsible for more than 60 percent of their business volume.

Without the visibility from mapping producers to their upstream and downstream business relationships, this business could be missing out on where to apply their efforts to best effect.

Risks of running at speed with poor hierarchy management

Siloed data

When different departments manage hierarchy information on spreadsheets or in the “notes” of a digital file, your data ends up siloed. That exacerbates the already-mentioned problems and causes the extra headache of making producers correct and re-correct every new contact at your business. More than that, you can’t accurately assess how your partners are performing. Who’s worth the time and expense you put into your partners, and who’s losing you cash for every year you pay for an appointment fee? If you don’t have visibility into your partners and their relationships, you’re missing the data on who’s critical to your success.

Wasting staff time and opportunity

When your organization doesn’t have your partners categorized appropriately and doesn’t reflect their relationships with you and with each other, then accuracy is a tedious manual process that requires your staff to spend time hunting down information. Regional variations in an organization’s pecking order add up to hours of data reconciliation, and that comes at an opportunity cost for the other higher-leverage work your staff could be doing. If you don’t want to spend time manually fact-checking information, you can always just accept that you’ll have a higher not-in-good-order rate for your license or appointment applications or business or commission processing. Because who doesn’t love a nice high NIGO rate?

Commission mismanagement

If you don’t know how much every producer in your downline is owed and how to split commissions across their upline agents, you may be facing several risks. Your lowest risk is that you’ll mistakenly pay out a commission and then have to claw it back. But you also risk violating state laws about commission mismanagement and triggering a regulatory audit. If you have W-9 employees who sell on your behalf, commission mismanagement could put you up against Department of Labor protections.

Reputational damage

Missed, delayed, or clawed-back commission payment? Slow onboarding process? Every touchpoint with your partners and, by extension, their clients is a moment you’re either impressing or distressing them. When your system doesn’t accurately represent where an agent fits into their business’s hierarchy, it’s like being repeatedly called by someone else’s name over and over.

Regulatory audit

Problematic payments and inaccurate documentation risks drawing the ire of a state regulator. Worse, manual hierarchy management for insurance carriers and agencies may mean turning a simple data inquiry into a full-blown audit and costing hundreds of thousands of hours in the data search.

Change management

Let’s try on a hypothetical: Your downstream agency partner has been owned and operated by the same agent for 50 years. The new owner steps in, and suddenly there’s chaos. You have multiple places to update—decades’ worth of records and hundreds of contracts need to change to reflect this new information. It’s an administrative nightmare for both you and the newcomer to your partnership.

What sets AgentSync Hierarchy Management apart

AgentSync Hierarchy Management stands out from the current market standards because it:

• Goes beyond simple parent/child relationships, and instead visualizes even the most complex hierarchies with the full context of who is licensed where for what contracts and products.
• Flows data seamlessly through the entire AgentSync Manage system, updating a full set of hierarchy-linked records when licensing statuses change or a business adds new contracts.
• Serves as the source of truth for hierarchy and relationship data, ensuring commission calculations in downstream systems are based on up-to-date, correct hierarchy info.
• Streamlines workflows, with approval requests routing automatically to the right stakeholders, dramatically cutting down on the time needed to onboard a producer or restructure a team.

Ultimately, much of what sets AgentSync Hierarchy Management apart is that it’s a solution purpose-built for insurance. Multi-level overrides, effective-dated changes, and required upline approvals? These aren’t some specialized custom work—these industry-specific needs come out of the box.

By using modern, intuitive hierarchy management to power your distribution channel management, you can move at speed and at scale without the business risks inherent to manual and traditional methods of relationship management.

To learn more about how AgentSync Hierarchy Management can speed your onboarding and scale your business efficiently, watch a demo or schedule a personalized consultation.

By William Nibbelin, Senior Research Actuary, Triple-I

The U.S. personal auto insurance industry saw a significant turnaround in 2024, achieving its best underwriting result since the pandemic began, according to Triple-I’s latest Issues Brief.  

In fact, with a net combined ratio of 95.3, personal auto insurance has outperformed the broader property and casualty (P/C) insurance industry in terms of underwriting profitability for 10 out of the last 20 years. A combined ratio under 100 indicates an underwriting profit. One above 100 indicates a loss.

This positive shift comes after a period in which personal auto premiums experienced fluctuations. While the overall P/C industry outpaced personal auto in premium growth from 2018 to 2022, personal auto saw a strong rebound in 2023 and 2024, with double-digit premium growth rates of 14.4 percent and 12.8 percent, respectively. This surge in premiums follows a notable decline in 2020, the first since 2009, largely due to reduced driving during the initial phase of the COVID-19 pandemic. Since then, vehicle miles driven have returned to pre-pandemic levels.

A major factor influencing auto insurance premiums has been the significant rise in replacement costs for vehicles and parts after the pandemic. Insurers adjusted rates in response to these increased costs. The changes in consumer prices for new and used vehicles, as well as parts and repairs, have shown a strong correlation with average insurance rate adjustments over the past decade:

• New Vehicles: 88 percent correlation;
• Motor Vehicle Parts & Equipment: 74 percent correlation;
• Used Vehicles: 79 percent correlation; and
• Motor Vehicle Maintenance & Repair: 78 percent correlation.

Looking at losses, the direct incurred loss ratio for personal auto improved considerably by 21.7 points from late 2022 to the end of 2024. However, this improvement wasn’t uniform across all types of claims. Auto physical damage claims saw more improvement than auto liability claims, creating the largest disparity between the two in over a decade of 15.7 points.

Loss trends in personal auto are shaped by how often claims occur (frequency) and the average cost of each claim (severity). For personal auto liability, while the number of claims has stayed below pre-pandemic levels, the average cost per claim has continued to rise year after year with a cumulative increase from 2019 to 2024 of 54.2 points.

One of the significant challenges contributing to the increasing severity in personal auto liability is what’s known as legal system abuse. This includes a rise in lawsuits, larger jury awards, and more attorney involvement in claims. This phenomenon, intertwined with broader inflation, has driven up auto liability losses and related expenses by a range of $76.3 billion to $81.3 billion from 2014 to 2023 according to the latest Triple-I | Casualty Actuarial Society study.

Another important factor impacting the auto insurance market is the state regulatory environment. A recent report by the Insurance Research Council on Rate Regulation in Personal Auto Insurance indicated that the process for insurers to get rate changes approved has become more complex across the country between 2010 and 2023. This has led to longer approval times and a higher incidence of insurers receiving less than their requested rate increases. These trends can ultimately affect the availability of competitive auto insurance policies for consumers.

Learn More:

Even With Recent Rises, Auto Insurance Is More Affordable Than During Most of Century to Date

New IRC Report: Personal Auto Insurance State Regulation Systems

U.S. Consumers See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs: New IRC Report

Life insurance is a topic usually associated with adults since it provides peace of mind for those who have someone depending on them financially. But there is life insurance coverage for minors as well, known as child life insurance or juvenile life insurance.

It can sound unnecessary or even a little morbid, but child life insurance offers an array of benefits, including financial planning and future insurability for your child. Let’s dive into what child life insurance is, its purpose and the key considerations when exploring this option.

Understanding Child Life Insurance

Child life insurance is typically a permanent policy designed to serve multiple purposes. Its primary function is to offer a death benefit in the tragic event of a child’s passing. While no parent wants to contemplate that scenario, it can ensure financial support for your family during an emotionally challenging time.

Another common reason parents (or grandparents) get coverage for their child is to build cash value over time. This cash value is not only a monetary asset, but also a tool for supporting their future financial needs.

Who Benefits from Child Life Insurance?

Child life insurance can help with a few key things: guaranteeing your child’s future insurability, forming a fund for major expenses later in life through the cash value and providing a death benefit if needed.

1. Future insurability:

   It can’t be overstated how important this first part is: securing your child’s future insurability. Unfortunately, you can’t predict what health conditions may impact your child as they age. Depending on the situation, they could be uninsurable later in life. If they’re insured now, they’ll be able to keep that permanent policy for life regardless of any health issues that may arise.

   Plus, life insurance premiums are typically more affordable the younger and healthier you are. By getting coverage for your child at a young age (as early as two weeks old), you can safeguard your child’s access to insurance and get a better policy at a more affordable rate than if they tried to get that same coverage as an adult.

Cash value:

Secondly, child life insurance acts as an investment for giving your child a strong financial start in life. The cash value that accumulates in the policy can be tapped to fund major life milestones, like getting their first car, paying for college or even a down payment on a house later on. The beauty of child life insurance lies in its flexibility—the cash value can be utilized at the discretion of the policy owner for any purpose you wish.

Death benefit:

If the unthinkable were to happen while a child is still young, the life insurance death benefit would be there to provide financial support for things like a funeral, medical expenses or leaving a legacy. Take the Koonsman family, for example, who made the fortunate decision to purchase permanent policies for both of their daughters when they were young. Their plan was to gift the policies to their girls once they were grown. Instead, they used Hope’s policy to pay medical bills and start a foundation in her honor after she died unexpectedly at age 19 from a birth defect that they thought was long in the past.

Getting a Child Life Insurance Policy

Purchasing a child life insurance policy is relatively straightforward. Through a licensed agent, parents (or grandparents with parental consent) can initiate the process of life insurance planning for their child. Generally, healthy children can be covered with ease, involving a questionnaire and a medical record check. In most cases, there’s no requirement for a physical examination if the child is born healthy. However, if a child is born prematurely or with health concerns, there might be a waiting period until they’re a year old or older.

Child life insurance policies are permanent, providing coverage throughout their lifetime, but flexibility remains a hallmark of these policies. They can be canceled at any point through cash surrendering, cashing out the policy’s value or discontinuing premium payments. If cashed out, there might be tax implications for permanent policies. Notably, these policies also enable policyholders to take out loans against the cash value, so it’s important to consult an insurance professional about your options.

 

In conclusion, the benefits of child life insurance extend far beyond its surface. It’s an investment in your child’s future insurability, a vehicle for financial planning and a means of establishing a strong foundation for life’s milestones. Whether you’re a parent or grandparent, exploring child life insurance could be key to unlocking a brighter future for the ones you love.

As electric vehicles grow in popularity, car buyers are charting a path toward a safer, less oil-dependent future.

New EVs aren’t the only driving factor here. Sales figures for used EVs soared in 2024, growing 61.3% year-over-year in November, while sales of new EVs rose by 13.6% within a similar time frame.

The General analyzed Cox Automotive and Kelley Blue Book data to explore this trend and share what consumers need to know before buying a used electric vehicle, as well as what EV sales growth means for the auto industry.

Though many factors determine EV purchases, cost plays a major role. According to Cox Automotive, average listing prices for used EVs have fallen by roughly 10% year over year as of November 2024. Additionally, leading EV manufacturer Tesla slashed prices multiple times in 2024.

The EV market has expanded significantly due to these lower costs, as The New York Times reported in June 2024. “We’re seeing younger people,” Alex Lawrence, a used EV dealer in Salt Lake City, told the Times. “We are seeing more blue-collar and entry-level white-collar people. The purchase price of the car has suddenly become in reach.”

New regulations are boosting the movement, too. The Biden administration’s Inflation Reduction Act provides up to $4,000 in clean vehicle tax credits for used EV purchases, a consumer incentive that may be in jeopardy under the Trump administration.

Beyond the price tag, many consumers purchase EVs because of sustainability concerns. A survey published by Rare in April 2024 found that both current EV drivers and potential buyers were interested in electric vehicles because of environmental benefits.

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Examining the battery concerns of potential EV converts

Since batteries are essential to EVs, prospective customers should keep a few factors top of mind when considering an electric vehicle.

First, range: Drivers accustomed to stopping on any corner for gasoline may be wary of the comparative lack of battery charging infrastructure. As of April 2024, the U.S. has one fast-charging EV station for every 15 gas stations. But ubiquitous lithium-ion batteries are fast becoming more energy-dense and cost-effective, and IRA incentives have spurred car companies to further invest in EV battery development.

Vital infrastructure is also coming online, with thousands of new charging stations opening every year. In December 2024, there were 194,427 EV chargers available to the public, including 49,604 DC fast chargers—a 10.5% rise from June 2024. Plus, according to a 2024 study from Recurrent, the average American EV driver uses only 8% to 16% of their available range daily, suggesting that fears of running out of juice may often be unfounded.

Beyond range, some EV critics have also raised concerns about the relatively fast depreciation of these cars. A 2024 analysis from Wired found that certain EVs lose up to 50% of their value within a year of purchase. Additionally, most EV batteries only last around 12 to 15 years, or eight to 12 years if used often in extreme conditions.

That said, most EVs will still save consumers money in the long run. Charging an EV at home typically costs a fraction of filling up a car with gas at the pump. No engine means no oil changes or many of the other tuneups necessary for gas-powered vehicles, saving EV owners well over $1,000 annually on maintenance, according to some estimates. And while new batteries are expensive, warranties protect consumers from high replacement costs; the majority of EV makers cover batteries for up to eight years or 100,000 miles.

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Manufacturers switching gears to meet EV demand

Despite the factors in electric vehicles’ favor, the auto industry has been slow to adapt to the EV revolution. In 2024, for example, manufacturers including Tesla and Ford pushed back plans to make more EVs. Concerns regarding the volatility of lithium and the United States’ reliance on imported batteries also persist.

But volume has continued to rise. Honda and General Motors collectively sold 78,951 more EVs in 2024 than they did in 2023, according to Cox. EVs are expected to make up almost 10% of vehicle sales in 2025, with 25% of all cars sold likely to be electrified in some way. This increase in market competition hasn’t been good for everyone, though. Tesla has long been the #1 EV seller in the U.S., but in 2024, the company sold 37,854 fewer vehicles than it had in 2023.

Going forward, the federal government’s EV stance under President Donald Trump will form another piece of this puzzle. As of January 2025, the Trump administration has paused funding for the IRA and may eliminate tax credits for EV purchases.

No matter what happens, drivers still seem keen to make the switch to electric transportation. And as costs come down further and technology progresses, EVs will become even more attractive. By 2030, EVs are expected to be cheaper than gas guzzlers, and advancements like U.S.-made sodium-ion batteries will likely make EVs even more eco-friendly, reducing the production of heat-trapping gases that harm human health and cause increasingly frequent extreme weather events.

Indeed, those who care about the environment are strongly motivated to go down this road.

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Written by Mike Taylor. Story editing by Cu Fleshman. Additional editing by Elisa Huang. Copy editing by Tim Bruns. Photo selection by Ania Antecka.

Digital risk management tools for 2025

Who else remembers the episode of Friends where they’re trying to move a couch around a tight corner on a staircase, and Ross starts yelling “Pivot!”

That pretty much sums up how a lot of businesses are feeling these days.

There’s plenty of uncertainty to go around, and there are plenty of questions about what lies ahead — and what the impact will be on businesses across the country.

If only we had a crystal ball that actually worked. Until then, the best thing businesses can do is prepare and plan ahead, which is the crux of risk management.

Not sure how to handle monitoring and risk-proofing all the different aspects of your organization? Good news: Digital risk management tools take the guesswork out of risk management and make it easy to identify, assess, and respond to threats.

So, since uncertainty has become a buzzword, and our “unprecedented times” have become a lot more precedented, we thought this would be an ideal time to look at digital risk management tools and how they can help businesses mitigate threats before they turn into problems. We’ll also keep looking for a working crystal ball.

Let’s get into it.

• What’s going on?
• Cybersecurity assessment platforms
• Business continuity planning software
• Supply chain risk management tools
• Compliance management systems
• Employee security training platforms
• Employee training tools
• What’s new from Embroker

What’s going on?

Business Continuity Plans Lacking Among SMBs: Nationwide Survey — Insurance Journal

A recent survey found that one in five businesses lack a business continuity plan, leaving them vulnerable to operational disruptions.

A Matter of Trust: How AI Is Reshaping Risk Assessment — PYMNTS

We’ve all heard the cyber horror stories of hackers and other threat actors using AI tools to conduct more sophisticated cyberattacks. But, on the flip side, AI is also helping companies to “supercharge their defensive capabilities.” And that’s a trend we can all get behind.

Five Things to Know On CrowdStrike’s New Exposure Management Launch — CRN

There have been a lot of headlines lately about CrowdStrike’s fast-growing Falcon Exposure Management offering. If you’re unsure about what’s been going on or looking for a rundown of just the highlights, this article covers the latest.

Global Trade Disruption Reshapes Business Risk Landscape — Risk & Insurance

Heightened risks around the economy, geopolitics, and climate change are leading business leaders to develop new frameworks for managing global supply chains. TL;DR: We weren’t kidding about there being lots of uncertainty to go around.

Cybersecurity assessment platforms

No one wants an unwanted visitor to crash a party. Now, let’s translate that to businesses and the digital world. Preventing unwanted guests (hackers) is where cybersecurity assessment platforms come in.

Cybersecurity assessment platforms are designed to help companies check how secure their digital information is — and then suggest ways to make it even safer. These tools can thoroughly analyze a company’s cybersecurity policies, regulatory compliance, and vulnerabilities, like setting the network password to “password123,” so businesses can remediate digital weaknesses. It’s all about making sure no one can sneak in through an unlocked side door and wreak havoc.

Examples include:

Bitsight: With more than 3,300 customers and 65,000 users, Bitsight provides real-time visibility into cyber risk and threat exposure, which can enable teams to quickly identify weak spots, detect threats, prioritize actions, and mitigate risk. Bitsight says its security ratings solution helps companies understand their own security performance and that of their vendors, clients, and other third parties.

SecurityScorecard: Recognized as a trusted resource by the U.S. Cybersecurity & Infrastructure Security Agency, SecurityScorecard delivers end-to-end supply chain cybersecurity to safeguard business continuity. SecurityScorecard created Supply Chain Detection and Response, which helps security teams actively prevent third-party breaches by enhancing the security preparedness of their organization and suppliers.

UpGuard: Helping businesses manage cybersecurity risks across their supply chains, UpGuard’s integrated risk platform provides businesses with a comprehensive view of their risk. Using proprietary security ratings, data leak detection capabilities, and remediation workflows, UpGuard helps organizations of all sizes proactively identify security vulnerabilities.

Software to keep your business running

Business continuity planning tools can save the day when a curveball is thrown your way — whether that’s a minor inconvenience or a major disaster.

These tools facilitate developing, documenting, and managing business continuity plans, ensuring operations can continue during and after a crisis. Designed to automate business continuity management processes, business continuity planning software helps organizations minimize downtime, protect assets, and ensure a swift recovery when disaster strikes.

Examples include:

Archer: Used by customers in 48 countries, Archer helps organizations transform risk management into business-enabling strategies. Archer offers a scalable approach that allows businesses to proactively prepare for and protect against potentially devastating disruptions. With Archer, businesses can identify and catalog critical processes and systems to develop business continuity and disaster recovery plans to safeguard operations.

Fusion: Fusion helps businesses build proactive continuity and resiliency strategies. The Fusion Framework System provides interactive ways to analyze all business aspects to identify risks, points of failure, and the appropriate response to mitigate damages. Fusion recently launched BC Plan inFusion, which lets customers upload static business continuity plans to have the information converted into usable data in just a few minutes.

Supply chain risk management tools

Supply chain risk management tools, unsurprisingly, help keep a company’s supply chain running smoothly. They help businesses identify, assess, and mitigate potential problems, such as supplier reliability, political issues, natural disasters, or sudden market changes.

By using these tools, businesses can stay ahead of challenges and reduce supply chain vulnerabilities and disruptions, which is increasingly critical in today’s interconnected business environment.

Examples include:

interos.ai: Described as the world’s first and only automated supplier intelligence platform, interos.ai offers lifecycle supply chain risk management to help mitigate hidden threats. The company uses AI to continuously map and monitor millions of suppliers and billions of relationships to protect organizations from various weak points for a comprehensive view of risk across physical and digital supply chains.

Resilinc: Resilinc’s supplier-customer collaboration platform integrates comprehensive data analytics, real-time risk event monitoring, mapping, and AI-powered predictive insights to give businesses an understanding of their multi-tier supply chain. Resilinc’s AI-powered platform can help organizations anticipate, mitigate, and respond to disruptions. Companies can track and analyze a variety of supply chain data points and potential risks.

Compliance management systems

Compliance regulations are constantly changing, and keeping up can feel like a challenging and never-ending game of catch-up. And the stakes are high since failing to meet regulatory requirements can lead to hefty financial penalties.

Compliance management systems are tools and controls that automate and streamline compliance monitoring, managing, and reporting processes, reducing the risk of violations and penalties. A compliance management system can include anything from risk assessments to compliance training.

Examples include:

LogicGate: A cloud-based platform, LogicGate says its goal is to make governance, risk, and compliance (GRC) processes easier for all businesses. LogicGate’s no-code app builder and pre-built templates let organizations adjust processes and workflows as needed and automate their own GRC tasks. LogicGate recently launched its Value Realization Tool, which provides insight into the financial value of GRC programs.

MetricStream: With over a million global users, MetricStream offers integrated risk management and GRC solutions that enable companies to transform risk into a strategic advantage. MetricStream’s platform promotes a holistic and collaborative approach to enterprise-wide GRC activities. According to MetricStream, its customers, on average, see a 90% reduction in time managing compliance activities.

Employee security training platforms

Think of employee security training platforms as a cybersecurity boot camp for your team -– but fun and without any of the militaristic intensity. These platforms teach employees how to spot cyber threats in the workplace, which is increasingly important since 95% of data breaches are tied to human error.

With employee security training, companies can promote a culture of cybersecurity awareness and empower employees to act as the first line of defense against cyber risks.

Examples include:

Infosec IQ: Infosec says its mission is to put people at the center of cybersecurity by providing knowledge and skills to help employees stay cyber-secure at work and home. Infosec IQ’s industry- and role-based cybersecurity training personalizes education so that it is relevant to an employee’s role and the cyber threats they’re most likely to encounter.

KnowBe4: KnowBe4’s HRM+ platform includes security awareness and compliance training, cloud email security, anti-phishing, real-time coaching, and more. KnowBe4 says it uses personalized and relevant content, tools, and techniques to “mobilize workforces to transform from the largest attack surface to an organization’s biggest asset.”

Employee training tools

Employee training tools are designed to promote a positive and collaborative workplace environment. Basically, they help get everyone on the same page with the company culture.

The tools can cover things like company policies, improving communication and teamwork, and even training for job-specific skills. The benefit of using employee training tools is more than just compliance — they can help boost employee morale, which is a definite bonus for recruitment and retention.

Examples include:

Emtrain: Emtrain’s solutions help develop inclusion, ethics, and respect as professional competencies. Emtrain partners with industry experts and uses current events to create video-based training on topics such as unconscious bias and respect. With Emtrain, companies can benchmark their corporate culture against the global community to identify issues before they become problems.

Traliant: Traliant offers tailored, interactive, story-based online training designed to engage employees. An in-house legal team ensures that the courses offered are continuously compliant. Traliant’s library of courses, including training on inclusion and code of conduct, can help broaden perspectives, achieve compliance, and elevate workplace culture.

Excelerator Consulting: Excelerator delivers custom programs focused on achieving measurable workplace improvements in areas like compliance training, leadership consulting, and HR functions. Their Excelerator HR Essentials option gives clients access to a dedicated virtual advisor, a mini HR audit, and an extensive document library.

What’s new from Embroker?

Upcoming events, stories, and more

Business Insurance Index: Tech Sector

The wait is over! Embroker’s 2024 Business Insurance Index: Tech Sector is here. Our detailed analysis reveals how tech companies are navigating business insurance decisions in the evolving risk landscape. One surprising trend: Tech companies with $25M+ in funding are increasingly opting for lower D&O limits.

Introducing Embroker’s new VP of Underwriting

We’re thrilled to welcome Stephen Easley to the Embroker team as the new Vice President of Underwriting. With more than 25 years of specialty underwriting expertise, Stephen brings a wealth of knowledge that will help expand our underwriting capabilities and refine our specialty insurance products. Check out this recent blog post to learn more about Stephen’s experience and vision for Embroker’s future.

Employment Practices Liability Insurance: Why Small Businesses Need EPLI

Embroker’s Head of Claims, Corrie Hurm, was recently interviewed for a business.com article regarding the importance of employment practices liability insurance for small businesses. This quote highlights the issue perfectly: “What is particularly troubling is that many organizations don’t recognize the need for EPLI until they are already facing a claim.”

Like what you’re reading?

Check out the Embroker Resource Center for more

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The annual Accenture Tech Vision report has always been a beacon for the future of technology. Now in its 25th year, this year’s report AI: A Declaration of autonomy highlights four key trends that are set to reshape the tech landscape – 1) The Binary Big Bang, 2) Your Face in the Future 3) When LLMs get their Bodies and 4) The New Learning Loop. I am going to zone in on “The Binary Big Bang”, the generation-defining moment of AI transition, as a transformative force for the insurance industry. The trend name really reflects the next great evolution in AI, particularly generative AI. The Binary Big Bang tracks the emergence of agentic systems, and how they challenge conventions around software development and the cost of building digital ecosystems. It dives into a major change underway in how software is designed, what we need from it, and who uses it. And it sets the stage for always-there AI, which will be rich with autonomous agents defined by rapidly expanding digital ecosystems.​  

Cracking the natural language barrier 

When foundation models cracked the natural language barrier, they started pushing the limits of software and programming, multiplying companies’ digital output and vastly accelerating innovation. As AI expands exponentially, this trend underscores how AI/generative AI (gen AI) is not just an add-on to existing processes but a fundamental shift in how technology is integrated into the core of insurance operations. AI models and agents are becoming integral parts of the insurance enterprise infrastructure, influencing everything from customer service and risk assessment to underwriting and claims processing. To fully harness the potential of these technologies, insurance companies need to rethink their approach to technology. Executives are in effect building AI ‘cognitive digital brains’ where the whole is greater than the sum of its parts. AI is not just about automating existing processes; it’s about creating new processes, workflows, and software that can drive innovation and efficiency. 

How insurers can capitalize on agentic frameworks 

So what exactly are AI agents? They are goal-oriented, autonomous systems that reason through problems, make decisions, leverage tools, and take actions on their own. AI agents are based on multimodal foundation models and can access external tools and data. With the evolution of GenAI towards agentic frameworks, insurers can go to market faster by breaking down the technology development lifecycle and delegating it towards agents:  

• The requirement managing agent : Bringing the industry knowledge along with best practices to effectively analyze the requirements and manage the progress, prioritization and completion.  

• The Code development agent : Breaking down the code creation into logical components to have a structured, function-oriented code that can be traced back towards requirements.  

• The testing agent : Agents programmed to perform various levels of testing mimicking the end user for accurate sampling and effective testing iterations.  

• Deployment and support agent : Agents that can help push the code to production and provide post-production fixes specific to environment. 

Three key benefits of AI model and agent integration  

Powered by intelligent data analytics, AI copilots, and sustainable AI, the integration of AI is causing three pillars of technology to emerge, each hugely beneficial to insurers: Abundance, Abstraction, and Autonomy. 

1. Abundance: The rising costs of legacy technology mean that insurers can no longer afford to delay modernization efforts. AI and gen AI are accelerating code generation, enabling everything from legacy code reverse engineering to reducing tech debt and eliminating obsolete code. For instance, 78% of insurance executives agree that AI agents will reinvent how their organizations build digital systems. This modernization is crucial to remain competitive. The shift will enable insurers to launch new products and services more quickly, with 62% of executives ranking this as a top priority if they had unlimited software engineering resources. An equal percentage prioritize adding new features to existing products and services. 
2. Abstraction: Gen AI is simplifying complex tasks and making them more manageable. This abstraction can lead to more efficient workflows and better user experiences for both insurance employees and customers. For example, generative AI and panoptic coaching can aid underwriting and claims decision-making, while agentic AI can drive personalization and enhance customer experiences. By creating simpler, more intuitive interfaces, AI can streamline processes and improve overall efficiency.  
3. Autonomy: AI systems are becoming increasingly capable of making decisions and performing tasks with minimal human intervention. This leads to faster and more consistent service, reducing the potential for human error and freeing up staff to focus on more strategic tasks. Once data integration is advanced within what we are calling the ‘cognitive digital brain,’ insurers can hard-code workflows, institutional knowledge, value chains, and social interactions into a system that operates at a higher level. 

AI makes the best use of data 

In addition, AI is revolutionizing how insurers use data. It aids in decision-making, identifies trends, uncovers unknown facts, and provides the right data at the right time. This not only enhances efficiency but also reduces underwriting and claim costs with increased accuracy. AI and gen AI enable: 

• Generation of documentation, use cases, data dictionaries, and user stories 

• Automated configuration into new modern platforms 

• Rewriting for the new modern tech stack 

• Reimagining requirements earlier in the lifecycle 

• Presentation of test cases for the entire application to the business prior to new build 

 AI-powered underwriting pioneers 

Exemplifying all of the above is QBE Insurance Group, a multinational insurance company headquartered in Sydney. To help make faster, more accurate decisions across multiple lines of business, QBE is scaling industry-leading, AI-powered underwriting solutions co-developed with Accenture. A series of learning sessions helped drive the design and build of the solutions that are now used to analyze new business submissions for completeness, appetite check and risk evaluation insights. As a result, for the product lines with solutions in production, QBE can now process 100% of the submissions they receive from brokers, greatly accelerating market response time. Through this collaboration, QBE will be able to identify and select risks more effectively, improve broker and customer experience and support growth. 

Swiss Re is also working with Yukka lab to transform reinsurance underwriting by providing each of their underwriters with an AI assistant that aggregates and pre-assesses the world’s news in real time to facilitate better and faster decision-making. The goal is to reduce the underwriting cycle, improve the cost ratio and finally, reduce claims. 

 A paradigm shift in how insurance companies operate 

The Binary Big Bang is more than just a technological shift; it’s a paradigm shift in how insurance companies operate. By integrating AI and gen AI into their core operations, insurers can achieve greater flexibility, faster development times, and enhanced innovation. The benefits of abundance, abstraction and autonomy are clear, and the industry is poised for an AI tipping point where these changes are embraced with enthusiasm. As AI continues to evolve, the insurance industry will become more efficient, more responsive, and more customer-centric, setting the stage for a new era of growth and innovation. 

Last week, we answered the question; What do people need to know about hurricane season?

In responding to that question, it occurred to me that there is more to the answer and I want to focus on the question of power.

For most of us most of the time, a power outage is relatively rare and short-lived.

But during a hurricane, all bets are off. A power outage that would normally take a couple of hours to fix could take three days to get to during a hurricane because

• It may not be safe to deploy restoration crews.
• Some crews may not be able to leave their own homes.
• Your line may not be in a high-priority area.

So that leaves us with the question, how do I provide power at my home when the grid is down. Life is better if you think about this question well before the storm begins to show up on the evening news, your tik tok feed, or YouTube. Like, think about this now.

There are three high-end ways to make sure that you have power when the grid is down. You could invest in solar panels and since you’re already in that far, make sure that they install the battery backup so that you can store a few days’ worth of power. You could also buy an electric vehicle if you’re a fan of those. They can be your battery backup if you lose power. Just make sure that you keep that EV charged because they can’t charge without power. You could also have a whole home generator installed at your house. These may run on gasoline, natural gas, or propane, and are designed to kick in automatically if the power goes down.

Now that we have that crowd out of the way, let me talk to the rest of us, who are looking for some way to have power just in case the grid goes down, and we don’t have the bankroll for the other solutions.

For those who want power, but don’t want much in the way of maintenance or fuel cost, there are several types of power stations that are relatively small and can power anything from a couple of phone chargers and fans to operating small kitchen appliances. These power stations can be charged by plugging into the house (before you need them) and many include a solar panel or can be connected to a portable solar panel.

Maybe you’re thinking about a more traditional generator. So let’s talk about those. A portable generator is usually small enough to be moved by one or two people and they can normally power much of your house, although pay attention to the running wattage, not the crank wattage, and make sure that you don’t exceed your generator’s ability to provide power. That’s why they have fuses, and they can go out on you if you’re not careful.

If you get a generator, take the following precautions.

• Use it outdoors in a well-ventilated area. I don’t care if you think someone might steal it, keep it outside. It’s burning gas and creating carbon monoxide. If you don’t know why that’s bad, just search the internet.
• Get a plug professionally installed. That way, when your neighbor comes over for the next cookout, you can show it off and humble brag that you’re ready for the next storm.
• Run it on the manufacturer’s recommended schedule. Put gas in, crank it up, and plug something in. Run it for a little while, and then shut it down and put it away. Not only can you flex on the neighbors who don’t have a generator, but it keeps the mud daubers from building a nest in your carburetor.

One more thing, if you get a generator that you hook into your home at all, no matter how you do it, or how big it is, this last point is the most important for you.

Turn off your main power shut off before you hook up, or turn on your generator. If you don’t do that, you will feed at least some of your power into the powerlines. It may not be enough to provide juice to your neighbor for their freezer, but it could be enough to injure or kill a power restoration crew member and you don’t want that. Their jobs are too hard without us adding a surprise level of difficulty to them.

Topics
Catastrophe
Natural Disasters
Hurricane