What small or midsized business wouldn't want a floor plan update? The ones that didn't even realize their walls had expanded. 

“When we think about exposures, many businesses used to think, 'I control my risk within the four walls of my office building,'" says Peter McMurtrie, president of property-casualty commercial lines at Nationwide. “But now, their risk is going outside of the four walls of their business. Their office building is now in their employees' homes and garages."

With the coronavirus pandemic plunging businesses into hybrid and remote work models as employees stay home or even move to other states, businesses have had to shift their mindset to the new work environment, which means the way independent agents approach their clients' risks must adapt as well.

“From a workers compensation perspective, you have emerging exposure with ergonomic setup—or lack thereof—in the home versus the more structured office environment," McMurtrie says. “And from the commercial property perspective, the fact that company associates are working from home means you're moving more company property off-premises and into homes. You have the risk of commingling and confusion around exposure in case of damage or loss of that property."

One particularly looming challenge is “the risks of cyberattacks," he adds. “Because of the virtual working network, we see increased attacks. It's a concerning emerging exposure, especially for smaller businesses, because most small businesses aren't fully educated or fully prepared for a cybersecurity issue."

More than half of small businesses don't offer cybersecurity training to all their employees, according to an October 2020 Nationwide Agent Authority survey. “That's despite the fact that one-third of small business owners don't think their business could recover if it experienced a cyberattack," McMurtrie points out.

The gap highlights a key area the insurance industry must respond to. “It's more than just coverage," he says. “It's consultative support and concentrated risk management. That's a role that both carriers and the independent agent fulfill when they work with businesses."

With these new types of exposures, McMurtrie highlights the importance of educating clients. “We look at the partnership with the brokers and agents we work with to offer this education, providing them with the tools and resources to communicate with their customers," he says.

To respond to such needs, carriers are shifting “how we think about coverage to ensure we're adapting or expanding our coverage to recognize companies' changing needs—what their product offerings are, how they're working," he adds.

Independent agents can help clients manage emerging risks by keeping a constant ear to the ground. “Knowing how rapidly things continue to change," McMurtrie explains, “it's all about constant communication and interaction with clients. Not just at renewal, but through the entire process. Understand how businesses are evolving to ensure the right coverage is in place for the exposure."

“Price sensitivity is definitely a factor right now," he says. “One of the best ways for a business to control the cost of insurance is to control their risk exposure. Agents can partner with clients to guide them and make them aware of the risks within their business that are driving their costs up."

Through creating awareness and providing resources to address those problem areas, agents can step into the new era of business and insurance culture.

“Businesses have learned how to be more adaptive during this time—and that's a good trait," McMurtrie says. “I think we'll see that behavior continue, but that means the relationship between the agent and the business must be tighter so the industry can understand changes and respond with coverage and guidance."

AnneMarie McPherson is IA news editor.