How Insurers Can Help Small Businesses Grow and Prosper
The past three years taught business owners resilience and adaptability. This is especially true for small businesses faced with the unique challenges of the pandemic, inflation, and the Great Resignation.
But the pandemic also proved to be a time of opportunity for small businesses: According to the Census Bureau, Americans created more than 5.4 million new companies in 2020, an increase of 30% — the highest total on record.
In 2023, growing companies need more support than ever as they scale. Having an insurance partner to help navigate complex issues can make all the difference.
Small businesses and start-ups play a vital role in the economy, providing a diverse array of jobs and driving growth, but they also face a unique set of challenges and risks. Insurers must protect and elevate them to support this entrepreneurial spirit, drive innovation, and ensure the economy grows.
Support System
Small businesses have much to deal with, especially in their early stages. Owners must ensure financial stability for their company while finding customers, planning for growth, and hiring the right people.
These companies have a thin margin of error to succeed and need all the attention and resources to grow. That’s where insurers come into play.
The first step is ensuring businesses are protected against potential losses that could negatively impact their bottom line.
For example, a maintenance contractor hired to operate and work on-site for a start-up gets injured on its premises. In that case, proper insurance coverage could insulate the business from incurring significant losses or liabilities initiated by a lawsuit.
A good insurance partner not only provides this type of insurance but also acts as a partner to the business, ensuring its owner understands what level of protection is right for them. This can be particularly important for those in high-risk industries or facing significant customer traffic with higher liability risks.
Peace of mind allows a business owner to invest their resources where they are needed most, helping to ensure long-term success and growth.
Fostering Growth
Small businesses often require more resources to invest in new technologies and innovative solutions, which can be critical to winning in a highly competitive marketplace.
They need all hands on deck to guarantee progress in the right direction.
Insurers can support research and development by improving cost certainty: By eliminating some of the unknowns in terms of the risk of loss, we help companies better understand where to invest their money.
For example, a business upgrading software to streamline its supply chain operations experiences a system-wide crash due to that upgrade process. The failure halts their entire supply chain. Without proper insurance, this disruption could have a disastrous impact on the business’s bottom line, impacting customers, payroll, company morale, and more.
It’s crucial to properly evaluate risk, as even one liability judgment could disrupt a company’s forward momentum — a significant setback for many companies. Proper coverage reduces associated financial risks, allowing small business owners to focus on their core operations and invest in their future.
Protecting Against Attacks
Small businesses usually lack larger organizations’ information security and anti-fraud precautions, so they tend to be the perfect victims for fraudsters.
According to a 2018 Association of Certified Fraud Examiners survey, small businesses had an annual median loss to fraud of $200,000. In comparison, larger organizations had an average loss of $104,000.
Suppose an employee makes a fraudulent entry and illegally transfers funds for their personal benefit; this could lead to significant losses for the company — both financially and reputationally — and considerably halt its growth. Business owners can more effectively mitigate losses with proper risk analysis and coverage.
Insurers often help business owners identify blind spots in coverage, avoid the unexpected, and provide adequate insurance when things go south. Insurers also furnish critical aid in identifying and preventing fraud and legal and financial support if fraud occurs.
Small business owners already have enough on their plates. They deserve an insurance partner who understands their unique challenges and vulnerabilities, aims to protect them, and help their business flourish.
The partnership between small businesses and insurance providers protects diverse business interests. It allows companies to continue to innovate, thrive, support job growth, and bolster the economic well-being of communities nationwide.