Why (and How) Small Business Owners Must Get Informed About Insurance

The small business owner community in the United States is large and widespread. Small businesses are big in the context of the nation’s economy. According to reports, between 1996 and 2020, small business employment in the United States increased by 15.9%, reaching around 61.6 million employees. This year, approximately 1.4 million new establishments opened and 447,519 remained in the running. These figures continue to rise year after year.

But of course, small business owners labor under the disadvantage of having to do it all themselves. This lack of external advice can hurt them when it comes to crucial financial decisions. For instance, small business owners are usually in desperate need of an insurance strategy and they may not even know it!

According to a 2023 survey, approximately 75% of small businesses in the United States didn’t have adequate insurance to back up their ventures.

Clearly, every small business should re-evaluate its insurance policies periodically. This is necessary to determine whether they are paying too much on insurance or too little to protect themselves.

Why do small business owners need to stay informed about insurance?

One of the most important reasons for any small business owner to stay informed about insurance is to ensure business protection and financial stability. Small businesses face numerous threats today.

  • Cyber-crimes are on the rise

Cybercrime is spreading like wildfire. Small business owners must remain informed about cybersecurity and how it can affect their operations. According to a 2021 survey, approximately 58% of small business owners admitted to having experienced a security or data breach at least once. The recovery time for a business after a cyber-attack is approximately 1-2 years for 42% of businesses, with approximately 7% of businesses accepting that they have not fully recovered from the damage. Knowing about cybercrime insurance is mandatory for all small businesses because everyone handles sensitive data or uses online platforms for payments, etc.

  • Macroeconomics at play

The world around us now influences the market. Macroeconomics can play a significant role in the success or failure of a business, from changing operational costs to consumer behavior. Inflation can significantly reduce purchasing power, affecting the revenue and sales of small businesses. A small business’s survival can also be influenced by global supply chain factors, wars, and other factors. Thus, every small business must understand the value of business interruption insurance to support the venture in case of closure.

  • Financial and legal protection

Small businesses typically have constrained cash flow and rely heavily on consistent sales to stay afloat. In that light, a variety of liability or legal challenges could prove fatal for the business. That’s why it’s important to know about policies like liability insurance, employee insurance, and others that can help a small business owner avoid being financially burdened while facing a lawsuit.

How to stay informed?

It can be overwhelming for small business owners who are sole captains or sailing with a small crew to be always aware of so many details. Also, being overly concerned with these aspects can divert their attention from growth and other critical operational aspects. So, how is a small business owner to stay informed about this crucial area?

Here are some resources to help small business owners stay informed.

  • Open forums and peer groups

Groups, forums, and other similar dedicated spaces can be an excellent place to begin. Small business owners can visit such groups and follow such online threads to quickly obtain the best information. Apart from that, joining communities dedicated to educating small business owners can be beneficial too. Many experts also distribute information in the form of easy-to-consume newsletters, which can be a great way to get topic-specific information and ideas.

  • Insurance agencies websites

According to one study, approximately 70% of small businesses purchased their insurance policies from insurance agents due to their extensive experience. This is without a doubt one of the most compelling reasons to stay connected to insurance agencies and their resource section to obtain information on the most current topics. When it comes to Gonzalez Insurance, we offer our expertise through blogs on small business insurance. We always say that we understand the pain of small businesses because we are one ourselves! This makes us more ready to listen to the concerns and questions of our small business customers and drives us to give the most appropriate response. You could say that our real-life struggles as small business owners help us better guide other small businesses.

  • Webinars and discussions

Events and webinars are another fun way to learn more about a specific topic. The hottest topics are covered in depth in various panel discussions, which can help small business owners learn about hot sauce without getting too deep into it. Such open forum discussions are ideal for those who have only a basic understanding of how to rely on experts without hiring someone in-house.

The Bottom Line

There is no doubt that insurance is an important aspect of any business, whether small or large. For small business owners, it is critical to invest in learning the fundamentals of small business insurance. Every company faces unique operational challenges and risk factors. Based on this, businesses require various types of insurance. Get in touch with our experts to learn more about how this works. Or go to any of the great online resources out there for more information!