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NEW YORK, May 6, 2019—On this first weekday of National Small Business Week (May 5-11), the Insurance Information Institute (I.I.I.) reminds entrepreneurs about the insurance policies they should consider as part of their business plans.
“Having the right types and amounts of insurance can make the difference between a business’s success and failure. In fact, nearly 40 percent of businesses fail after disaster strikes, and that figure grows dramatically for small businesses,” said Sean Kevelighan, the I.I.I.’s CEO. “Effective risk management is just as important as productivity. Understanding your business’s risks and taking proper precautions means a small business can spend more time charting its progress than responding to unforeseen emergencies. In particular, the growing threat of cyber intrusion on small businesses is growing rapidly – one in every 10 were hit in 2017, according to our research. So we encourage those customers to contact their insurance carrier or agent to ensure they have the right coverage in today’s digital world.”
While 10 percent of small businesses were hit by at least one cyber incident in 2017, only 31 percent of them had cyber insurance coverage at the time, according to Small Business, Big Risk: Lack of Cyber Insurance Is a Serious Threat, a report issued jointly by the I.I.I. and J.D. Power in 2018. Cyber-related losses totaled about $188,400 on average, for each impacted business, a survey last year of 500-plus industry participants found.
Small businesses are generally defined as enterprises with fewer than 50 employees. They create about two out of every three new jobs each year, according to the U.S. Small Business Administration.
Besides cyber insurance, entrepreneurs should ask their insurance professional about the following coverages:
Small businesses also should consider purchasing commercial vehicle, employment practices liability insurance (EPLI) and terrorism policies. In addition, many small businesses offer life, health and disability coverages to its employees.
For more information about business insurance from the I.I.I., review these articles.
THE I.I.I. IS A NONPROFIT, COMMUNICATIONS ORGANIZATION SUPPORTED BY THE INSURANCE INDUSTRY.
Insurance Information Institute, 110 William Street, New York, NY 10038; (212) 346-5500; www.iii.org