A Blueprint for Success Through a Hard Insurance Market for Fashion & Apparel Businesses

Since the beginning of the COVID-19 pandemic, the global apparel and textile sector has been among one of the most heavily disrupted, largely due to supply chain disruption and other factors. As fashion and apparel businesses continue navigating the difficult road to recovery, rebuilding operations, supply chain restrictions and generating income are not the only challenges they face as many industry-specific operational risks remain. Insurance coverage to protect organizations against the financial impact of those risk exposures is a large expense in any business budget, and in today’s hard insurance market, this can be even more difficult for recovering businesses. In layman’s terms, a hard insurance market is the upswing in a market cycle when insurance premium rates are escalating and insurers are disinclined to negotiate terms. Underwriting standards tighten and insurers closely monitor insurance rates and manage coverage capacity. Through the remainder of 2021 and beyond, insurance buyers will continue to feel the effects of the hard market.

Getting through this challenging time requires businesses to present themselves in the best possible light to enable their brokers to showcase the best-case scenario to insurers. This means that, in partnership with your insurance advisor, you should demonstrate to the marketplace why they should want your business (i.e., a good loss history and corrective measures taken to prevent similar losses from reoccurring, proactive risk management/ transfer practices, proper safety protocols and property upgrades).

Underwriting losses, poor industry results, a decline in investment income due to lower interest rates, an increase in natural disaster claims and social factors, such as “social inflation” of claims and once-in-a-century events such as COVID-19, are all factors directly contributing to the state of the market.

On the property insurance side, water damage and catastrophic weather events have been costly for insurers, while on the liability side, increasing claims for slips and falls have led to expensive lawsuits. Some companies are exiting the space, resulting in fewer players in the market. The economic fallout from the global pandemic includes lower interest rates, pushing premiums higher yet again as insurers cannot rely on investment behind the scenes to remain profitable. Additionally, concern relating to COVID-19-related liability claims is tightening the market even further.

What can fashion and apparel businesses do?

Within such an environment, underwriters carefully review submissions, questioning and reviewing every detail of information on the application. With your insurance broker, work together toward a professional submission that highlights the strengths of your risk management efforts.

Completing an insurance review and gathering information takes time. Here is what you can do to improve your situation in this hard market:

Be proactive: Providing updated information to your broker early in the renewal process will allow you to obtain your renewal terms sooner and address options with your broker.

Be complete: Insurance underwriters have limited time to go back and forth with your broker requesting missing information — you can assist by ensuring your file is complete.

Be current: Improve maintenance, implement risk services recommendations and/or undergo an operational evaluation — underwriters favor and value clients that take care of their business.

These are just some of the ways you can get ahead of rising premium costs and navigate the current state of the insurance market. Now more than ever, it is imperative to work with your insurance advisor to review your coverages and to understand what your P&C policies cover, what they don’t and the best ways to mitigate the individual and unique risks of your properties.

Frank DeLucia serves as senior vice president of Hub International Northeast, a full-service global insurance brokerage. He can be reached by phone at (212) 338-2395 or at frank.delucia@ For more information on Hub, please visit

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