Hiscox study: many small business owners cite government regulation as major obstacle to their business’ success and growth
Key roadblocks include regulation, financing and recruiting. 93% cite confidence as key component to their success.
New York, May 19, 2014 – Hiscox, the global specialist insurer, today released a study revealing that nearly one in three (31%) small business owners believe government regulation is the biggest obstacle standing in the way of their success and growth. The study also found that more than 1 in 10 (13%) small businesses suffered a lawsuit with negative consequences. However, 29% of small businesses have no insurance protection. Despite the struggles entrepreneurs face, the study found 93% consider confidence a key component in overcoming obstacles and succeeding. The online survey was conducted by Harris Poll on behalf of Hiscox in February and March, 2014 among 1,023 U.S. small business owners.
Obstacles to Small Business Success
Small business owners were most likely to cite government regulation that is unfavorable to small businesses as a top obstacle in the success or growth of their business (31%), followed by a lack of available funding or support (23%), having trouble finding the right new employees (12%) and being affected by natural disasters such as hurricanes or floods (8%). Despite an increase in data breaches and hacking, only four percent of small business owners were concerned about data or security breaches potentially exposing data or impacting sales.
Lawsuits can be another obstacle for small businesses without the necessary protections in place. More than one in ten (13%) small business owners had been sued by an employee, vendor or customer. Of those, nearly half (47%) admitted the lawsuit negatively impacted their business financially (29%), resulted in the loss of customers (13%) or negatively affected the business’s reputation (12%).
“There is a perception versus reality gap among SBOs when it comes to protecting our businesses,” said Brian Moran, small business advocate, consultant and Hiscox Entrepreneur in Residence. “Roadblocks will inevitably be put in your path to success. Understanding your risks and having the right protection in place means you can confidently spend time focusing on what’s most important – running your business.”
Confidence is considered a key component to small business success. Ninety-three percent of small business owners cite it as an extremely or very important factor in their success.
“Confidence is a critical element in the DNA of successful small business owners and entrepreneurs,” said Kevin Kerridge, Director of Small Business Insurance at Hiscox. “It’s important, however, to have the necessary protection in place to mitigate potential obstacles, which helps small business owners feel more confident to tackle the challenges at hand.”
Protecting their Business
Despite a vast majority of small business owners (86%) considering business insurance at least somewhat important in protecting them from unforeseen issues – such as lawsuits - as they run their business, twenty-nine percent reported their company is not currently covered by any type of business insurance.
A majority of small business owners (62%) wish it were easier to shop for and buy small business insurance. Meanwhile, notable factors making a small business owner at least somewhat more confident in an insurer include providing policies tailored to their company’s specific risks so they can avoid paying for unneeded coverage (95%) and specializing in insuring businesses in their industry (93%).
Hiscox specializes in insurance for small business owners, such as professional liability (errors and omissions insurance) and commercial general liability customized for a range of fields including IT, consulting, marketing, photography, real estate, beauty and health. Hiscox offers business insurance quotes direct and online in real-time along with other liability insurance products, such as business owners policies. Since launching their ground-breaking online service in the U.S. in 2010, Hiscox has received an average customer service rating of 4.8 out of 5 and 96% of those surveyed would recommend Hiscox (Feefo customer surveys).
This survey was conducted online within the United States by Harris Poll on behalf of Hiscox between February 25 and March 12, 2014 among 1,023 U.S. owners of small businesses, defined as having either fewer than 10 employees or less than $2.5 million in annual revenue. An oversample of 98 business management consultants and 101 real estate agents is also included. A full methodology, including weighting variables, is available upon request.
About Hiscox Small Business Insurance
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE:HSX). Hiscox is the first company in the U.S. to offer insurance for small professional services businesses direct, online, and in real-time. We provide professional liability, general liability and business owner’s insurance, underwritten by Chicago-based Hiscox Insurance Company Inc., which is rated ‘A’ (Excellent) by A.M. Best Company. Additional information can be found on the Why Choose Hiscox ? page. Coverages are subject to underwriting and may not be available in all states.
Hiscox also provides professional liability, property and specialty insurance to U.S. businesses through US-based brokers. This communication does not constitute a solicitation of business by Hiscox’s syndicates at Lloyd’s, London.