A recent survey by ERGO NEXT found that 73% of small businesses are underinsured, with 64% of insured small businesses not covered for all major risks. This leaves business owners financially responsible for unexpected costs after liability claims, property damage, cyber attacks, or other disruptions.
Why Are Small Businesses Underinsured?
The most common reasons for underinsurance include concerns around insurance costs, lack of legal requirements, difficulty identifying coverage gaps, and confusion about what policies are needed to protect the business. Among businesses without insurance, 54% say coverage is not legally required, and 50% say it costs too much.
Recent startups are more likely to have business insurance, with 82% of businesses in their first year having insurance coverage, compared to 67% of businesses that have been operating for one to five years. However, even with this increased adoption, significant protection gaps remain.
Regular reviews of insurance coverage can help prevent gaps from developing over time. As businesses evolve, their risk exposure changes, and reviewing coverage regularly is one of the simplest ways to ensure protection keeps up with the business.
Original reporting: El Paso News (HLL/CB) — read the source article.
