{"id":613,"date":"2018-05-25T13:58:29","date_gmt":"2018-05-25T13:58:29","guid":{"rendered":"https:\/\/www.insurancebee.com\/blog\/?p=613"},"modified":"2023-02-08T10:04:16","modified_gmt":"2023-02-08T10:04:16","slug":"key-findings-insurancebee-risk-survey","status":"publish","type":"post","link":"https:\/\/www.insurancebee.com\/blog\/key-findings-insurancebee-risk-survey","title":{"rendered":"Key findings from the InsuranceBee Risk Survey"},"content":{"rendered":"

\"man<\/strong><\/p>\n

Would you risk it all? <\/strong><\/h2>\n

Blood, toil, tears and sweat are what it takes to build a successful business. When you start out, everyone warns you about the sacrifices you\u2019ll make and the money you\u2019ll pour into it, too.<\/p>\n

Your success is hard won. So why would you risk it all?<\/p>\n

Yet almost a third of small business owners are<\/em>.  And it\u2019s not so much a calculated risk they\u2019re taking, it\u2019s more of a \u2018fingers-crossed\u2019 attitude.<\/p>\n

How do we know this? We asked them.<\/p>\n

In-depth inquiry<\/strong><\/h2>\n

We recently surveyed just over 1,000 SMB owners aged 25 through 55+ across the US. We wanted to know what they consider to be the biggest risks to their business.<\/p>\n

Turns out financial risk is by far their biggest concern at start-up (93%):<\/p>\n

\"\"<\/p>\n

Once they\u2019re up and running, economic uncertainty still nags nearly half of SMB owners (47%). Other items on their worry list include being sued, damage to reputation, and an employee or partner dying.<\/p>\n

\"\"<\/p>\n

Unexpected exposure<\/strong><\/h2>\n

To be honest, none of these answers surprised us. What did was that, given their concerns, almost a third (29%) of the SMB owners surveyed have no business insurance whatsoever:<\/p>\n

\"\"<\/p>\n

Why?<\/p>\n

\u2018I don\u2019t need insurance because my business operates in an ethical manner\u2019 said one. \u2018I can take care of problems by myself\u2019, explained another.<\/p>\n

Naturally, we were curious to know what sort of back-up plan these firms had. What if they were sued, for example? How would they protect their reputation, their assets, their income?<\/p>\n

A bit on the side<\/strong><\/h2>\n

Only a small number (18%) have contracts and procedures in place to help mitigate risk. Just under a third (27%) have put money aside:<\/p>\n

\"\"<\/p>\n

Of these, only 11% worked out what they might need with the help of an expert. 33% made a rough guess.<\/p>\n

Alarmingly, 28% said they\u2019ll just rely on whatever they happen to have in the bank:<\/p>\n

\"\"<\/p>\n

<\/h2>\n

An unsafe bet<\/strong><\/h2>\n

What\u2019s even more worrying, is that the highest percentage of SMB owners without insurance are sole proprietors and those whose businesses have a gross revenue of less than $50,000 a year.<\/p>\n

\"\"<\/p>\n

Yet these are the very SMB owners who, when asked if they consider themselves to be risk-takers, were far more likely to say no.<\/p>\n

\"\"<\/p>\n

As a sole proprietor\u2019s finances are often tied to the family income, if you risk one, you risk the other. Which means those with the most to lose, are the most exposed. Without the right insurance, just one claim made against them could wipe them out.<\/p>\n

Because here\u2019s the rub. The average claim can cost<\/a> between $20 and $50K. If it ends up in a lawsuit, however, a pay-out for reputational harm \u2013 libel and slander \u2013 can be as much as $75K.<\/p>\n

Why put all that hard-earned income on the line?<\/p>\n

Ignorance \u2013 not bliss<\/strong><\/h2>\n

Our research suggests many SMB owners are simply not aware of the risks they face. Just because you operate your business ethically doesn\u2019t mean everyone else does. You can be sued even when you\u2019re not at fault.<\/p>\n

It\u2019s worth having a solid contingency plan. And that includes making sure you don\u2019t just have coverage in place, you have the right<\/em> coverage.<\/p>\n

We were surprised to learn, for example, that while some SMB owners offering a professional service – like sales, media and marketing or engineering – have general liability insurance, they don\u2019t have professional liability coverage (or E&O, as it\u2019s also known).<\/p>\n

For some SMB owners, it\u2019s not an \u2018either or\u2019. Both policies are necessary for comprehensive coverage. Seek out a broker specializing in small business insurance. They will be able to talk you through exactly which products you need \u2013 and why.<\/p>\n

Watch this space<\/strong><\/h2>\n

More research from our first Risk Survey<\/em> is coming soon. In the meantime, have a look at the stats in our infographic<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Would you risk it all? Blood, toil, tears and sweat are what it takes to build a successful business. When you start out, everyone warns you about the sacrifices you\u2019ll make and the money you\u2019ll pour into it, too. Your … Read more…<\/a><\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56],"tags":[],"class_list":["post-613","post","type-post","status-publish","format-standard","hentry","category-smb-advice"],"yoast_head":"\r\nKey findings from the InsuranceBee Risk Survey - InsuranceBee Blog<\/title>\r\n<meta name=\"description\" content=\"We recently surveyed 1,000 SMB owners to find out what they consider to be the biggest risks to their business. 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