The 2018 Small Business Risk Report reveals that while small business owners are aware they face multiple risks and growing concerns, they often are not spending enough time assessing their insurance needs.
With risks evolving and becoming more complex, it's more important than ever for small business owners to consult with independent agents to evaluate their insurance needs and help ensure they are properly protected.
As we look at how the risks small business owners face align with what keeps them up at night, 94% are exposed to cyber and data breach risks. They also rate data breaches and cyber attacks at the top of their list of concerns.
While 72% of businesses report that they have crime and employment related risks, concerns related to fraud (16%), employee dishonesty (19%), the safety/well-being of employees (18%), and lawsuits from current, former or prospective employees (9%) are not high on their radar.
% of SBOs who answered YES
80% of small businesses recognize that they are exposed to risk in multiple areas. Small businesses engage in business activities that present several different kinds of risks.
Media coverage on discrimination, harassment and data breaches has skyrocketed in recent months, bringing more attention to these areas for small business owners. While small business owners face multiple risks, the top two areas of risk facing the majority of respondents are cyber security incidents (94%) and employment related allegations (72%).
We've examined how likely small businesses are to purchase insurance to help protect themselves from these growing risks. Overall, we've found that a small percentage of small business owners have strong confidence they are adequately insured, but a larger group has plans to obtain or expand insurance coverage in these evolving areas of risk.
There is a subset of small business owners (~11%) who are either not aware cyber coverages are applicable to their businesses or do not know if they are adequately insured against these risks.
Small businesses are being targeted by hackers and malicious threats. It's crucial for small business owners to have plans in place to keep data safe–and the right coverage in order to recover from a cyber security incident.
33% of small business owners report they have strong confidence they are spending enough time exploring insurance coverage options for their business. Only 37% have strong confidence they are adequately insured.
And, while small business owners acknowledge their risks continue to grow and evolve, only 57% have reviewed their insurance program in the past 12 months. By not regularly evaluating their insurance programs, small businesses are faced with potential coverage gaps.
82% of small business owners report they agree proper coverage is more important than price. And, 33% rate breadth of coverage as their number one priority when selecting insurance. However, only 21% report leveraging outside experts, such as independent insurance agents, to help evaluate their business risks and guide their decision-making processes.
The Hanover Insurance Group, Inc. is the holding company for several property and casualty insurance com- panies, which together constitute one of the largest insurance businesses in the United States. The company provides exceptional insurance solutions in a dynamic world. The Hanover distributes its products through a select group of independent agents and brokers. Together with its agents, The Hanover offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. Through its international member company, Chaucer, The Hanover also underwrites business at Lloyd's of London in several major insurance and reinsurance classes, including marine, property and energy. For more information, please visit hanover.com.
Forbes Insights is the strategic research and thought leadership practice of Forbes Media. By leveraging proprietary databases of senior-level executives in the Forbes community, Forbes Insights conducts research on a wide range of topics to position brands as thought leaders and drive stakeholder engagement.
Forbes Insights surveyed U.S. small business owners (SBOs) throughout the the country In the survey, small business owners were asked how they approach exposures to their businesses and how they consider the proper ways to protect their companies in today's evolving and challenging business environment. The survey was conducted by email, included one open-ended question, and was fielded February 13, through March 8, 2018. The Hanover was not identified as a participant or sponsor of the survey.