Top 5 Insurance Trends SMBs Need to Know in 2025

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Running a small or medium-sized business is never easy. As the owner of The Overmyer Insurance Agency (OIA), I know firsthand how much work goes into keeping your operations running smoothly. Between serving customers, managing your team, and making financial decisions, insurance probably isn’t the most exciting part of your day—but in 2025, it’s more important than ever to stay informed.

This year, we're seeing some real shifts in how insurance carriers are pricing policies, what risks they’re focusing on, and how they’re working with businesses like yours and mine. Whether you run a professional service firm, a construction business, or a local shop, these are the top 5 trends that could affect your coverage, premiums, and peace of mind.

1. Climate Risk Is Driving Up Premiums—Even for Businesses Outside Disaster Zones

One of the biggest shifts we’ve seen in recent months is climate-related losses impacting insurance rates across the board. You might think, "I’m not in a wildfire zone or on the coast, so why is my property insurance going up?" The reality is that carriers are spreading the risk—and the costs—nationwide.

At OIA, we’re helping clients review and update their property valuations. It’s not just about making sure your building and contents are adequately insured—it’s also about understanding how climate models are influencing your rate. For example, if your area has seen increased flooding or wind activity, you may now be categorized differently.

Pro Tip: Ask your agent if your policy has updated replacement cost estimates. Underinsurance is one of the most common issues we see when reviewing older policies.

2. Cyber Insurance Is Getting Harder (and More Important) to Secure

Hackers don’t care how big your company is. In fact, smaller businesses are often easier targets. Cyberattacks, especially ransomware incidents, have spiked over the past year, and insurers are taking notice. Many carriers are tightening requirements or pulling out of the cyber insurance space altogether.

I’ve had several clients recently get declined or required to implement new cybersecurity tools before a quote could even be provided. Things like Multi-Factor Authentication (MFA), endpoint protection, and proper data backups are now baseline expectations.

At OIA, we work with leading cyber markets like Coalition and At-Bay, which offer coverage tailored to small businesses. We also help you understand what these policies cover—from data breaches and ransomware to business interruption.

Pro Tip: Even if you don’t think you’re a target, if you store client data or process payments, you need cyber coverage.

3. Artificial Intelligence (AI) Is Reshaping Underwriting

Here’s something you may not have thought about: a lot of insurance companies now use AI algorithms to analyze your risk profile before a human even looks at your application.

That means everything—your business classification, revenue, claims history, even your website—can influence your quote. We’ve seen AI speed things up for sure, but it’s also made it easier to be misclassified or declined without explanation.

That’s why having a knowledgeable, down-to-earth agent matters more than ever. At OIA, we still pick up the phone and talk to underwriters. We advocate for your business, especially if your operation doesn’t fit neatly into a box.

Pro Tip: If you’ve been declined or received a surprisingly high quote, ask if an algorithm made the decision. There may be room for reconsideration.

4. EPLI (Employment Practices Liability Insurance) Is No Longer Optional

Employee lawsuits are on the rise, even for small teams. We’re seeing more cases involving wrongful termination, discrimination, retaliation, and wage disputes.

EPLI used to be something only larger companies carried, but that’s changed. Many business owners I work with are surprised to learn that their general liability policy won’t cover an employee lawsuit.

At OIA, we’ve been adding EPLI to more and more policies this year, often at affordable rates. Some insurers even bundle it with cyber or general liability coverage for added convenience.

Pro Tip: If you have employees—or even independent contractors—talk to your agent about EPLI. It’s one of the most overlooked protections in today’s litigious environment.

5. Carriers Are Auditing More Aggressively

If you’ve received an unexpected audit bill in the past year, you’re not alone. Insurance companies are becoming much more diligent about confirming reported revenue, payroll, and subcontractor usage—especially for general liability and workers’ comp policies.

We’ve seen clients get hit with $10,000+ adjustments simply because they didn’t update payroll records or classify their contractors correctly.

At OIA, we walk our clients through the audit process to help prevent surprises and ensure their information is accurate from the start. We also recommend that business owners take a more proactive role in organizing payroll and subcontractor records year-round.

Pro Tip: Keep a file of certificates of insurance (COIs) for your subcontractors and verify that they carry the proper limits. This alone can prevent costly reclassifications and save you from unexpected premium adjustments.

Final Thoughts: We’re Business Owners, Too

Insurance doesn’t have to be confusing—or frustrating. At The Overmyer Insurance Agency, we’re not just advisors—we’re business owners who understand what it’s like to juggle coverage decisions, budgets, and compliance.

2025 is shaping up to be a year of change, but it’s also a great time to reassess your risk, revisit your policies, and make sure your coverage reflects the world we’re living in now—not the one from five years ago.

If you’re unsure whether your current policies align with these trends, I’d love to help. Let’s take 20 minutes to walk through your coverage together and make sure you’re on the right track.

We are here to help, contact us anytime for a business insurance review, or quote:

908-476-8685

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