Small Business — 75% are Underinsured

Small businesses — and the owners of such — struggle with understanding insurance as much as most individuals don’t get how their personal lines insurance works. That means, they, too, are often underinsured.

Hiscox recently took a survey of small business owners. Of the businesses surveyed, 70% of the owners and managers of 1,000 businesses had a serious lack of understanding of the insurance they currently carry.

Shockingly, 75% of them are not properly insured. An even bigger concern comes from what we noted in the opening paragraph. When it comes to understanding insurance, things fall apart.

  • 71% have no understanding at all of what their business policy covers
  • 83% could not accurately describe what a general liability policy covers
  • 30% didn’t have a general liability policy
  • 40% had not updated their general liability policy in a decade or more

Here’s what those businesses did have:

  • 65% do have general liability coverage
  • 45% purchased property insurance
  • 35% covered their workers with worker’s compensation insurance
  • 32% have professional liability insurance

Hiscox also noted in its conclusions how invaluable the independent insurance agent is to the process of insuring a business. Their advice and knowledge is incalculable.

  • 70% of small businesses prefer to purchase insurance through an independent agent or broker
  • 56% of the 1,000 businesses surveyed found the relationship with an independent agent to be their most helpful source of information about insurance
  • 42% prefer to purchase their insurance in person
  • 29% want to purchase business insurance online

Source link: Insurance Business America —

Source link: Insurance Journal —

About PIA Western Alliance

The Professional Insurance Agents Western Alliance is a membership organization promoting and enhancing the success of independent agencies seeking to grow, learn and be heard within the industry.


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