According to the 2018 Small Business Report, as little as one-third of small business owners spend sufficient time assessing their insurance needs, and less than half have reviewed their policy and coverages within the past year.
Small businesses come in many different shapes and sizes, and coverage needs can vary. Moreover, the day-to-day responsibilities of small business owners seldom leave enough time to give insurance the necessary thought.
Small business owners face several difficulties when attempting to find the right coverage. However, only 21 percent of small businesses are leveraging recommendations about coverage from outside experts.
One of the toughest challenges businesses face is an increasingly complex business environment. Cyber threats, employment-practices liability and international risks are just some of the exposures that didn’t exist in the past that now threaten businesses.
There are tens of millions of small businesses in the United States, and trends such as the gig and sharing economy suggest that the number of Americans working independently outside traditional business models is growing. However, going it alone means that these individuals must face an array of insurance challenges themselves. The problem is their coverage needs are complex and misconceptions common.
Finding the right coverage
For instance, many home-based businesses believe their homeowners policy covers business exposures, but there is likely no protection for business liability, property damage or business-interruption coverage. Options for home-based businesses, such as an in-home business owner’s policy and incidental business endorsements, can be obtained, but depending on a business’ activity, may not provide complete coverage.
Furthermore, business owners must consider other protections such as life insurance, health insurance, disability protection and workers’ compensation. The same applies for working via app-based companies like Uber, GrubHub or Upwork, which also often blur the lines between personal and professional liabilities.
Unfortunately, there’s no one-size-fits-all coverage, and just because your business might seem small, your insurance needs are never simple. Additionally, your small business might not stay small for long, which means frequently reviewing your insurance needs with a qualified and licensed insurance professional is imperative.