More than One-Quarter of Small Businesses Still Don’t Buy Insurance: Hiscox

Last week, global specialty insurer Hiscox published results of a survey of small business owners, revealing that 29 percent have no insurance protection, even though 13 percent have suffered a lawsuit.

Among the 13 percent of small business owners that said they had been sued by an employee, vendor or customer, roughly half reported negative business impacts, such as financial issues, lost customers and reputational damage.

The results of the Hiscox survey, querying small business owners about their top concerns as well as their abilities to overcome obstacles to success, also revealed that nearly one-third, or 31 percent, believe that government regulation is the biggest obstacle standing in the way of their success and growth.

What other obstacles stand in the way of success and growth?

After regulatory obstacles, the business owners said these barriers were the most worrisome:

• A lack of available funding or support, cited by 23 percent
• Difficult finding the right new employees, selected by 12 percent
• The impact of natural disasters, such as hurricanes or floods, 8 percent.
• Data or security breaches potentially exposing data or impacting sales, cited by only 4 percent.

The online survey of 1,023 U.S. small business owners was conducted by Harris Poll on behalf of Hiscox

February 25 and March 12, 2014. For the purposes of the survey, small business owners are defined as having either fewer than 10 employees or less than $2.5 million in annual revenue.

With respect to insurance buying, the survey found that

• 86 percent of small business owners said they consider business insurance at least somewhat important in protecting them from unforeseen issues, such as lawsuits.
• 62 percent wish it were easier to shop for and buy small business insurance
• Notable factors making a small business owner at least somewhat more confident in an insurer include providing policies tailored to their company’s specific risks so they can avoid paying for unneeded coverage (95 percent) and specializing in insuring businesses in their industry (93 percent).

Source: Hiscox USA