Wakefield Research conducted a survey that produced some intriguing data about small business owners’ insurance knowledge and expertise. A general insurance knowledge test was taken by all respondents, and 96% of them failed. Three out of ten respondents of the survey acknowledged that their company is not covered for hard times by any type of business insurance.
The good news is that the majority of business owners realized they needed insurance protection for their companies. A little over 50% of respondents acknowledged that they were unsure of the best policies for their particular business model, which made them doubtful about selecting the right ones for their companies.
It’s clear that there is a huge knowledge gap among small business owners about insurance. There is also abiding confusion because of a lot of options out there. To add to that, there is also the possibility of encountering fraud. For instance, businesses are known to fall victim to government impersonation scams among others. These can include phony business grant applications or threatening to sue the owner of the company.
No wonder then that it is difficult for small business owners to have full faith in the security of insurance and the good intent of insurance providers.
The inadequate coverage of small business owners
According to reports, 75% of small businesses in the US may not have enough insurance. The exact meaning of the business owners’ policy was unclear to about 71% of business owners. Such statistics mean that small businesses are not ready for an unannounced threat or attack.
One reason why business owners do not understand enough about the policies their business needs is heavy-duty jargon. Complex terms and text can be a little intimidating for people who come from non-finance backgrounds. Insurance companies also are of little to no help with their one-size-fits-all policies, which can confuse the owners tremendously. These policies can also be very costly for the owners, who, depending on their business model, may only need some of the policies’ coverage rather than the full umbrella of protection.
However, this issue is easily solvable with the correct knowledge and understanding. It just requires a little personalization and tailored policies, which can work in the small business’s favor.
How can small owners start trusting insurance?
- Less jargon and easy-to-understand policies
Small business owners need clear policies and options without any hidden clauses or technical terms to be confident of the offered policies. Agencies should try to provide a human point of contact for business owners seeking insurance assistance. They should listen to the concerns of the small business and then make the fundamentals of the insurance policies easier to understand.
- Better customer service and touchpoints
Better, one-on-one customer service must follow once the policies are explained and understood. As a result, the company owners may build faith in the procedure and insurance providers. Simple touchpoints, short wait times, and prompt responses from the agency, all help in building trust.
- Customized policies for better solutions
The most important step then is customizing the set of policies. Every company has different requirements. For instance, a business that sells products might require different insurance coverage than one that offers its services to the customers. Therefore, it is critical to curate an exclusively tailored portfolio of insurance policies that can protect the company from all angles. A comprehensive analysis to identify the appropriate areas for insurance coverage is essential to create just the right insurance strategy that’s neither too much nor too little.
Why is trusting insurance important?
- To avoid any legal compliance
The US Courts website states that 418,400 petitions were filed in the country in 2021 just by consumers. Small business owners may be faced with a wide range of legal cases, including those involving worker compensation, general liability, and product liability, among others. All of these may result in court cases, compensations to the injured party, or, in the worst case, temporary or permanent business closure. The company may experience severe financial hardship as a result. Small business owners must obtain the appropriate insurance and have faith in the insurance policies they are associated with to prevent this.
- To avoid financial fallout
As discussed above, with legal issues come financial implications. For instance, a small business owner may get dragged into a legal case. It is essential to obtain the appropriate insurance and have faith in the insurance process to emerge unscathed at the end of it all. Small business owners must discuss their business openly with the insurance company to receive specially designed bundles for their needs. For instance, a small business may not require auto insurance, but due to its location, it may require liability and flood insurance. The right set of policies can cover them exactly to the extent they need. Therefore, a small business can greatly benefit from choosing the right agent.
As a small business, Gonzalez Insurance is aware of the needs and challenges of small business owners. We take all the necessary care to offer unbiased advice and assist companies in determining which insurance policies are best for their needs. Our comprehensive portfolio analysis makes it easier for small businesses to trust their insurance approach. Get in contact with us to learn more about our offerings.