According to an analysis by The Hartford, approximately 40% of small businesses are likely to experience a property or general liability claim within the next 10 years.
Among these claims, burglary and theft are the most common, affecting about 20% of small businesses over a five-year period, with an average cost of $8,000 per incident. While fires are less frequent, impacting 10% of businesses in the same timeframe, they are among the most expensive claims, averaging $35,000 in damages.
According to the Federal Emergency Management Agency (FEMA), approximately 40% of businesses do not reopen following a disaster, and an additional 25% fail within one year.
Similarly, the U.S. Small Business Administration (SBA) reports that 25% of businesses do not reopen after disasters.
These statistics underscore the critical importance of disaster preparedness and business continuity planning for small businesses.
Small businesses are increasingly vulnerable to cyberattacks and data breaches. In 2021, 61% of small and medium-sized businesses (SMBs) were targeted by cyberattacks, with 46% of all breaches impacting organizations with fewer than 1,000 employees.
Despite this, only 14% of small businesses feel adequately prepared to defend against such threats.
The financial repercussions of data breaches are significant. In 2024, the global average cost of a data breach reached $4.88 million, a 10% increase from the previous year.
For small businesses, the average cost of a breach ranges from $120,000 to $1.24 million, depending on the severity.
Workplace injuries pose significant challenges for small businesses, often leading to substantial financial and operational setbacks. In 2022, the total cost of work-related injuries in the United States was estimated at $167.0 billion, encompassing wage and productivity losses of $50.7 billion, medical expenses of $37.6 billion, and administrative expenses of $54.4 billion.
Notably, smaller firms experience higher rates of workplace injuries compared to larger organizations. Research indicates that businesses operating for five years had less than half the annual workplace injury rate of those that lasted only two years.
Additionally, a significant proportion of workplace injuries occur among less experienced employees. The Travelers Companies reported that 35% of workplace injuries involved workers in their first year on the job, resulting in over 6 million missed workdays.
Auto accidents involving commercial vehicles pose significant risks to small businesses, leading to substantial financial and operational challenges. In 2022, large trucks were involved in 120,200 crashes resulting in injuries, marking a 2.5% increase from the previous year.
These incidents not only jeopardize employee safety but also contribute to considerable economic losses. The National Highway Traffic Safety Administration (NHTSA) reported that motor vehicle crashes in 2019 resulted in an estimated economic loss of $340 billion, encompassing medical expenses, legal costs, property damage, and lost productivity.
For small businesses, the financial impact of a single accident can be devastating, underscoring the necessity of comprehensive commercial auto insurance and robust driver safety programs to mitigate potential risks.
Rideshare drivers need commercial auto insurance because personal auto insurance policies do not cover vehicles used for commercial purposes, such as transporting passengers for hire.
Protecting your business and team starts with the right coverage.
The loss of key personnel due to death or disability can have a profound impact on small businesses. A survey by the National Association of Insurance Commissioners revealed that 71% of small firms are highly dependent on one or two key individuals for their success; however, only 22% have key person life insurance in place to mitigate such risks.
Additionally, research indicates that 67% of businesses consider it likely that key person risk will affect them within the next three years, with 55% acknowledging that the loss would have a significant impact on their operations.
These statistics underscore the importance of implementing key person insurance to safeguard against potential financial and operational disruptions.
Workplace injuries pose significant challenges for small businesses, often leading to substantial financial and operational setbacks. In 2022, the total cost of work-related injuries in the United States was estimated at $167.0 billion, encompassing wage and productivity losses of $50.7 billion, medical expenses of $37.6 billion, and administrative expenses of $54.4 billion.
Notably, smaller firms experience higher rates of workplace injuries compared to larger organizations. Research indicates that businesses operating for five years had less than half the annual workplace injury rate of those that lasted only two years.
Additionally, a significant proportion of workplace injuries occur among less experienced employees. The Travelers Companies reported that 35% of workplace injuries involved workers in their first year on the job, resulting in over 6 million missed workdays.
