Small and medium-sized businesses (SMBs) represent a vital part of the economy, providing employment opportunities and contributing to the growth of the communities they serve. However, despite their status, SMBs often underestimate the importance of having adequate commercial insurance coverage. In fact, a recent survey of 500 small business owners in the US by NEXT Insurance suggests that most (90%) small business owners lack confidence that they’re properly insured yet only 33% reported exploring professional assistance. The truth is that too many SMBs are not well informed and as a result are unfortunately underinsured, leaving them vulnerable to a range of risks.
One reason why SMBs are underinsured is that they often believe that their general liability insurance policy is enough to cover all potential risks. However, general liability insurance only covers certain types of claims, such as bodily injury, property damage, and advertising injury. It does not cover other types of risks that SMBs often face, such as cyber-attacks, employee theft, or natural disasters. To be fully protected, SMBs need to have a range of commercial insurance policies in place that are tailored to their specific needs.
Another concern for SMBs is budgeting proper resources to pay for rapidly growing premiums in this current, high inflation environment. While it’s true that commercial insurance can be expensive, being underinsured can ultimately cost SMBs more in the long run. For example, if a business experiences a significant loss that is not covered by their insurance policy, they may be forced to pay out of pocket or even face bankruptcy.
Finally, SMBs find themselves underinsured simply because they are not aware of all the risks they face. There are rapidly emerging threats that many businesses may not realize exist such as the potential impact of a cyber-attack or the importance of having business interruption insurance. By working with an experienced insurance agent or their PEO, SMBs can gain a better understanding of new risks and ensure that they have the appropriate coverage in place.
SMBs should not underestimate the importance of having adequate commercial insurance coverage. Being underinsured can leave businesses vulnerable to a range of risks that can ultimately have a significant impact on their bottom line. By working with an experienced insurance agent or PEO, and investing in the right policies, SMBs can protect their businesses and ensure their long-term success within their communities.
Contact Kevin Murphy for more information about Insur-Fi.