About 99.9% of the US businesses are small. These small businesses also make up a significant percentage of the working population. But it is also true that these businesses have to face up to all manner of threats and risks.
Unfortunately, not all small businesses (about 40%) are adequately insured.
The insured ones tend to raise claims for a range of threats, from burglaries and thefts to accidental fires, storms, floods, injuries, general liability, product liability, employee frauds, etc.
Clearly, as a business owner, it is nearly impossible to be unaware of these threats so why don’t all small businesses get insured? What do they seek that they do not find?
Let’s delve deeper into the issue to understand what the small business owners want from their insurance providers.
Insurance can seem expensive. Of course, the expense is probably not more than the cost of dealing with adverse situations. But, the average cost of a Business Owner’s Policy, a kind of umbrella coverage for the small and medium-sized companies, range from $500-2000 annually. And if you aim to buy separate policies to cover the specific situations relevant to your business, the costs will increase. Under such circumstances, these businesses may seek less optimal but more affordable solutions to protect their business. Hence, affordability is a primary requirement for small business insurance.
Many large insurers have fixed policies for small businesses. It’s hard to customize options and benefits. But not all the threats mentioned in the policy are specific to every small business. So, why should one pay for everything? Customization is thus the need of the hour for small business owners, who are already on a tight budget. For example, for a business with few employees, who work remotely, it may not be necessary to get full-scale property insurance. So, the difficulty of customization is one reason why small businesses fail to get proper insurance. They are unlikely to over-insure so they under-insure themselves, often increasing the risk they carry.
Convenience and service
Small business owners have much to do. They are great at what they do but usually understanding the nuances and complexities of insurance policies and processes isn’t included in their range of skills. They get intimated by the nitty-gritty of the task like raising claims, generating insurance certificates, tracking claims, seeking advice, etc. They worry about making the wrong choices or messing up some substantive part of the process. Until insurers acknowledge this barrier and offer extreme convenience and elevated customer service that these business owners can trust, they are likely to be shy to invest.
Small business owners need an insurer reliable and trustworthy enough to help them at every stage of the insurance process. This starts with deciding what policy or combination is right for them and carries through to providing help if a claim has to be made or some other need addressed. They need someone they can easily talk to and depend on. They look for a reliable insurance provider. In fact, most small business owners tend to prefer trustworthiness, availability, and approachability over anything else. Until they get that confidence, they are unlikely to make significant investments.
The insurance policies can be difficult to comprehend at the first go. Small business owners need someone to explain things to them in clear, concise terms. Transparency is essential in such discussions. Why will someone buy an expensive insurance policy that seems to be laden with hidden terms? The insurer must take the time to explain how to reduce the premium rate, as well as all the policy inclusions, and exclusions. Small business owners have an infinite capacity to take smart decisions provided they have the data they need.
Small business owners lay great emphasis on relationships. They seldom experiment and tend to stick with one insurance provider for the long term. But this is a two-way street that the insurer must travel on too. From having a friendly approach to offering exceptional customer experience, business owners seek a personal touch as well as professional service. Relationships take time and effort to build. But if an insurance provider manages to lay the first brick of trust, an unshakable bond can be formed.
Now, finding the right insurance provider, who ticks all these boxes, can be tricky for small business owners. The selection process is onerous. That’s why many insurers fall short. But when an insurer fits the bill, a great and mutually beneficial relationship can follow.