However, 82% took some steps themselves to protect their business, such as checking their coverage or conducting a risk assessment, according to the survey. Despite this, 90% of small business owners said they lack confidence that their business is adequately insured.
“Insurance has long been considered a complicated but necessary part of running a business,” said Alon Shiran, vice president of product at NEXT Insurance. “Insurtechs like NEXT are changing that by offering digital-first, self-service platforms that are easy to navigate and understand, making the insurance underwriting process simple and seamless. Our priority at NEXT has always been to enable small businesses to thrive. Through our digital-first, self-service platform and machine learning-based solutions, we offer entrepreneurs coverage tailored to their specific business needs.”
Key findings from the survey:
- Small business owners sweat the small (and big) stuff: More than half (51%) of respondents identified a professional error as a top potential risk that could negatively impact their business this year. Small business owners were broadly unanimous about their top concerns for 2023: 68% are most worried about inflation, followed by lower consumer spending, the possibility of a recession and supply chain issues
- Most small businesses are underprepared and underinsured: While 90% of small businesses are not confident enough that they have adequate insurance, 29% of respondents did not have business insurance coverage. Fifty-one percent of respondents said their organization is less than “very well” prepared to address potential risks, but 18% of all respondents are not taking or planning any steps to better protect their organization in the next six months
- Insurance competes with taxes as a knowledge gap for small businesses: More than half (53%) of small business owners said their biggest barrier to getting insurance was knowing what policies and coverage they need. Despite this, only a third actually seek professional help for their insurance needs. On the general liability insurance knowledge test, 96% of respondents failed the grade (70% or higher). None of the 500 survey participants received a perfect score
- The insurance must be tailored to the company: Respondents to the survey included men and women, urban, suburban and rural dwellers, and entrepreneurs of all generations. Rural entrepreneurs were more worried about inflation than suburban owners (71% vs. 64%). Business owners over 45 were more concerned about cyberattacks and data breaches than those under 45 (41% vs. 30%). Women were more likely than men to believe that their knowledge of insurance coverage and policy requirements was a barrier to getting insurance (60% vs. 50%). Women were also more likely to have no insurance (35% vs. 25%).
Continue reading: NEXT Insurance taps into first General Counsel
“Small business owners today have to wear a number of hats and often feel pressured to be experts in everything from tax and insurance to finance and human resources,” Shiran said. “This is an unrealistic expectation and thankfully there are many resources designed to support small businesses with the guidance, training and tools they need to overcome some of the most common challenges they face.
“Insurance can be a daunting part of running a business, particularly because without proper coverage, businesses can suffer significant financial losses that affect or could affect their bottom line. At NEXT, our goal is to remove that burden with a simplified digital shopping experience, embedded offers from partners, customizable policies, accessible resources and deep expertise so small business owners can focus on what matters most – running their business.”
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