Less than 37% of small business owners feel they have adequate insurance protection, according to the 2018 Small Business Report, conducted by Forbes Insights and The Hanover Insurance Group. 

Small businesses come in many different shapes and sizes, and their coverage needs can vary wildly—which often renders multipurpose products insufficient. Moreover, the day-to-day responsibilities of the small business owner seldom leaves them with enough time to give their insurance needs the necessary thought.

“The small business owner wears a lot of hats,” says Chip Hamann, chief underwriting officer, small commercial, at The Hanover. “They’re focused on sales and revenue because that’s what keeps them in business. Things like insurance policies become secondary.”

The study also reports that as little as one-third of small business owners spend sufficient time devoted to assessing their insurance needs, while less than half haven't reviewed their policy and coverages within the past year.

The solution? You. “It starts with the independent agent—the trusted adviser,” explains Michael Keane, president, core commercial, at The Hanover.

Small business owners face several difficulties when attempting to find the right coverage. One of the toughest is an evolvingly complex business environment, “which is hitting them from a number of different areas,” says Keane, who cites examples like cyber, data breach, employment practices liability, professional liability and international exposures.

The main challenge for small businesses is that “there is no one size fits all—the business itself can change day to day, and certainly annually,” Keane says. “Small business doesn’t mean simple business. That is really where the independent agent plays a key role in helping the small business owner assess where their needs are.”

“There are all sorts of complexities that didn’t exist 30 years ago,” Hamann agrees. “It used to be that someone would do something from start to finish. Now, they outsource all sorts of different things, such as where they get their goods from, who sells their goods on their behalf—exposures are growing because businesses are more interconnected.”

Importantly, every small business has specialized insurance needs; according to the study, 80% recognize they face exposures in more than one area. Moreover, small businesses are waking up to the fact that they need to assess their coverage: 41% are planning on obtaining or expanding cyber coverage, while 59% are planning on obtaining or expanding EPLI coverage.

But with only 21% of small businesses leveraging recommendations about coverage from outside experts and 82% agreeing that proper coverage is more important than pricing, Keane says “it’s an opportunity for both the business owner and the agent to sit down and have a comprehensive review of what the needs are.”

 Will Jones is IA assistant editor.