Surprising Small Business Insurance Stats and What Your Business Should Do About Them

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The InsurTech revolution is taking the digital world by storm. It involves using technology and data to disrupt the industry by delivering solutions suited for today’s customers. Startups are at the forefront of this revolution, and you shouldn’t be left out.

Data is a key component in driving successful business outcomes through sound decision-making. Knowing what’s happening in your industry gives you an edge over the competition, and understanding these quick stats about standard business insurance can help you get started.

1) The Average Small Business Insurance Costs

Insurance costs are a crucial consideration when searching for the right plan for your business. Being able to compare different plans’ pricing to the industry’s average allows you to select a plan that offers optimal coverage at the most reasonable cost.

Based on data for insurance companies, businesses paid these average insurance rates in 2021.

For general liability insurance, businesses paid an average of $1,667 in annual premiums or $139 monthly. For workers’ compensation, the average annual rate was $3,085. Professional liability insurance cost an average of $1,660 per year, and business owner’s policy averaged about $2,240.

Using these stats allows you to calculate your potential annual insurance cost and identify the most savings possible. For example, bundling policies helps to save several hundred dollars every year. Be sure to review your policies every year to ensure you don’t overpay for insurance you don’t use and you have enough coverage based on your business’s growth.

2) Employee Injuries

Employee injuries cost U.S. businesses over $150 billion every year. In 2019, approximately three private industry employees out of 100 suffered fatal occupational injuries and illnesses. These cases cost businesses about $42,000 per every medically consulted injury.

The manufacturing industry experiences the most injury cases, accounting for 15 percent of the total cases. In the industry, about 28 percent of the injury cases were strains, sprains, and tears. Workers who were most prone to injuries included laborers and stock, freight, and material movers.

As a business owner, knowing the specific stats in your industry allows you to take the necessary measures for employee safety and purchase adequate insurance coverage. It’s advisable to hire a risk assessment professional to identify workplace safety risks and create a plan to minimize these risks.

3) The Cost of Slip and Fall Bodily Injury Claims

The cost of slip and fall claims ranges from $30,000 to $40,000, with an average of $35,000. These claims account for about 10 percent of all claims. In fact, four out of 10 small businesses are likely to face a general liability or property claim within 10 years.

Bear in mind that these claims take into account lost wages, loss of earning capacity, medical bills, and pain and suffering. When searching for the right workers’ comp insurance and commercial general liability policy (CGL), it’s vital to factor in such costs.

You can minimize your insurance costs by implementing safety measures to reduce slips, trips, and falls and training your employees on workplace safety. Be sure to review your CGL policy at least once a year to ensure the coverage is adequate to protect your growing business. In some cases, it might be wise to consider an umbrella policy if you think claims may surpass your CGL coverage limit.

4) Cyberattacks on Small Businesses

One in every five small businesses faces a cyberattack, and about 60 percent of these businesses close shop within six months. Surprisingly, only 31 percent of small businesses have cyber insurance, which is essential in today’s digital era.

Hackers are always scouting for data for ransom, blackmail, or black market sale. You never know when your business is the target. Fortunately, cyber insurance protects you from such unexpected events. It protects your business from claims that result from attacks, such as hacking, phishing, computer viruses, data breaches, and trojan horses.

Apart from the policy, it’s advisable to invest in cybersecurity software and employee training to protect your computer and network systems. Also, be sure to have a contingency plan for dealing with attacks. Even small attacks can be quite costly to your business.

Insurance by the Numbers

Today, modern businesses face different challenges, and being able to anticipate them is a differentiating factor. Investing in insurance policies ensures your business has adequate protection in case the unexpected happens. Apart from insurance plans, consider investing in employee training, safety equipment, and security systems to prevent specific risks.

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