A new study has found that insurance is often a blind spot for small business owners, with the vast majority of them uncertain if they are “adequately insured” and what risks their policies actually cover.
According to the survey by online insurance site Next, 90% of the 500 small business owners polled said they are not confident that their businesses are adequately insured. As well, 96% of them showed a poor understanding of their insurance policies and what they cover.
In fact, 51% said their business was less than “very prepared” to face potential risks, but 18% of respondents said they are not taking steps in the next six months to better protect their firms. Even more shocking: 29% said they have no insurance at all.
The findings paint a picture of many small business owners potentially going uninsured or underinsured for risks facing their operations because they are choosing to go it alone when purchasing insurance instead of getting professional help.
What are the biggest external threats that concern business owners?
- 68% cited inflation as a top stressor for their business
- 42% cited reduced customer spending as a primary concern
- Almost 30% said supply chain issues are one of their business’s biggest stressors
- 14% cited the tight labor market as a top issue
What are the biggest internal risks keeping small business owners up at night?
- 51% said making a professional mistake is one of their biggest worries
- 39% said an injury or illness that sidelines their employees would negatively affect their business
- 36% of owners said that cyberattacks and data breaches are among their primary risks
We can help
One of the main drivers of uncertainty about the adequacy of coverage is small business owners’ knowledge of insurance:
- 40% said it’s more stressful to understand insurance than taxes
- 50% said the complexity of business insurance made them worry they don’t have the right coverage
- 53% said their greatest barrier to obtaining insurance is not knowing what coverage and policies their business needs
- When quizzed on general liability insurance specifics, 96% of respondents did not receive a passing grade (70% or higher). None of the 500 respondents got a perfect score, indicating that many still need the proper support to navigate the industry
Despite that, only 33% of them seek out professional help from an insurance broker when shopping for coverage. This can be a big mistake since brokers like us are trained to ask you questions to identify any potential uninsured risks your business may face.
With so many business owners unclear about their insurance and their coverage needs, are you sure your organization is properly covered?
We can help by reviewing your current policies to see if you need to increase limits or add new coverages. Additionally, we ask the right questions to uncover any potential uninsured risks you may face. And we will make the process easy and reduce your stress.
Contact Shannon Wolford, VMA’s Director of Membership and Sales at email@example.com or 415-710-0568 to get easy clear counsel and protect your small business.