Hiscox: Three out of Four Small Businesses in the US Aren’t Protected Against Claims

  Hiscox Survey reveals pervasive underinsurance and insurance illiteracy across the US

Atlanta, GA – October 9, 2023 – Hiscox, the leading small business insurer, found that 75% of small businesses in the US are underinsured, and over 70% do not understand what business insurance covers. An underinsured business leaves business owners financially and legally liable for costs beyond insurance limits.

The Hiscox Underinsurance Survey surveyed 1,000 small business owners in the US between July 11th and July 23rd, 2023. Key findings include:

  • “Small” business is anything but: in the US, 47% of small businesses who have been in business for 3 or more years have had a revenue increase since 2021, and 32% have seen a decrease.
  • Widespread misunderstanding of insurance coverages: the vast majority of small business owners do not know what basic insurance policies cover; 71% not understand what a Business Owner’s Policy (BOP) covers, and 83% fail to correctly describe a General Liability (GL) policy’s coverage.
  • Three out of four business owners would be left out of pocket in an incident: not only is there a strikingly high number of small businesses without any fundamental insurance (35% who do not have General Liability), 75% of small businesses in the US are underinsured. Of the US small businesses who have been operating for ten years or more, 39% have never updated their General Liability insurance.

“Buying business insurance is often seen as a checkbox exercise and a one size fits and covers all purchase,” says Kevin Kerridge, CEO of Hiscox USA. “This is a potentially catastrophic mistake and could spell the end for a business. Change happens to the best of us, and like a favorite t-shirt, it’s unlikely business insurance is going to fit after a few years. Owners should always let their insurance agent know if their business has grown or changed. Just like a business, insurance should never be stagnant.”

How to make sure your business is fully insured:

As a business owner, there are some key ways that you can stay fully protected:

  1. Before buying or renewing insurance, research the needs of your specific industry online or speak to an expert. You can find some great resources online, such as recommendations for what insurance you need for your unique business.*
  2. Let your insurance agent know the good, the bad, and the ugly. Omitting or misrepresenting information on your insurance application may result in policy invalidation, claim denial, and potential legal consequences. More accurate information means more accurate protection.
  3. Update your insurance every two years, or if your business has changed by more than 20%. Business insurance should grow and evolve with your business; if your business has recently expanded or has launched a new service, it is likely that it is not covered by your current policy. Let your insurance agent know when something changes.

*You can speak to a licensed insurance agent online at www.hiscox.com or you can call 1-866-283-7545.


The Hiscox Survey was conducted by Wakefield Research (www.wakefieldresearch.com) among 1,000 US small business owners defined as those with 1 to 50 employees, between July 11th and July 23rd, 2023, using an email invitation and an online survey. Data has been weighted.

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.

Related Materials

The 2023 Hiscox Underinsurance in Small Business Report

About The Hiscox Group

Hiscox is a global specialist insurer, headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Our ambition is to be a respected insurer with a diverse portfolio by product and geography. We believe that building balance between catastrophe-exposed business and less volatile local specialty business gives us opportunities for profitable growth throughout the insurance cycle.

The Hiscox Group employs over 3,000 people in 14 countries, and has customers worldwide. Through the retail businesses in the UK, Europe, Asia and the USA, we offer a range of specialist insurance for professionals and business customers as well as homeowners. Internationally traded, bigger ticket business and reinsurance is underwritten through Hiscox London Market and Hiscox Re & ILS. In the US, Hiscox small business Insurance is underwritten either by Hiscox Insurance Company Inc., a Chicago-based insurance company, or a Hiscox Syndicate at Lloyd’s, London, which is available on a surplus lines basis through licensed surplus lines brokers.

Our values define our business, with a focus on people, courage, ownership and integrity. We pride ourselves on being true to our word and our award-winning claims service is testament to that. For more information, visit www.hiscoxgroup.com.

The content provided above is provided for general informational purposes and is not intended, nor shall it be deemed, to be a solicitation of insurance with regard to any particular or specific person or entity.

Media Contacts

Lucy Baines       
Hiscox USA       
+1 646 560 9399       
[email protected]

Hayley Susino       
Hiscox USA       
+1 646 452 2365       
[email protected]