Small Businesses, Big Risks

Insurance needs and perceptions shift as small businesses grow

Mar 15, 2011, 08:30 ET from Hiscox USA

NEW YORK, March 15, 2011 /PRNewswire/ -- As small businesses grow, owners have more difficulty understanding how much insurance they need to properly cover their business.  A recent survey by specialist insurer Hiscox found major differences in the insurance needs and purchase preferences of small businesses depending on the size of the company. However, nearly three-quarters (72%) of small businesses of all sizes agreed that business owners should purchase insurance as soon as their business is launched.

The Hiscox USA Small Business Survey found that:

  • The bigger a business grows, the more its owners wish they knew about how much insurance they need. Established small businesses* were twice as likely to cite "not understanding how much to insure their business for" as the number one mistake small business owners make when purchasing insurance, vs. micro small businesses**. (21% versus 9%)
  • The smaller the size of a business, the more likely they are to use their personal network for insurance advice. Micro small businesses are twice as likely to purchase insurance through referrals from friends or colleagues, compared to established small businesses. (45% versus 23%)
  • Established small businesses are much more likely to purchase insurance through brokers compared to micro small businesses. (69% versus 39%)

*Established small businesses have annual revenues over $2,000,000.

**Micro small businesses have annual revenues of less than $250,000.

"As a small business's revenue increases, so does the level of complexity and confusion about the proper amount of insurance coverage needed to cover against risks. A lawsuit against a small business could be crippling, not only to the business itself, but to the owner's other assets, including their house," said Kevin Kerridge, small business insurance expert from Hiscox USA.

"People starting up a new business are dealing with a lot of questions, and insurance can help give them the security they need against the unknown. It's important that small businesses are talking to people who understand the specifics of their business and the risks they face," Kerridge continued.

Designed specifically for the small and home-office market, Hiscox Small Business Insurance is customized for a range of knowledge-based professions including IT, management consulting, business consulting and marketing. Hiscox offers professional liability insurance (errors and omissions) and general liability insurance for small businesses.  Hiscox also offers workers' compensation insurance provided by EMPLOYERS®.  Hiscox's licensed insurance advisors are solely focused on helping small businesses with their insurance needs.

To learn more about Hiscox Small Business Insurance, visit or speak with a Hiscox licensed advisor at (888) 202-3007 (Monday through Friday, 8:00 AM10:00 PM EDT).

Note to Editors

The Hiscox USA Small Business Survey reports the findings of a survey conducted of 501 small business executives. Respondents included decision makers and owners of small businesses with 100 full-time employees or less. The survey was conducted via live telephone interviews by ORC International between January 19 and 27, 2011.

About Hiscox in the U.S.

Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE: HSX). There are three main underwriting parts of the Group – Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox International includes operations in Bermuda, Guernsey and the USA. Hiscox ASM Ltd, Hiscox Underwriting Ltd and Hiscox Syndicates Ltd are authorized and regulated by the UK Financial Services Authority. The ability of syndicates at Lloyd's to do business in the USA and its territories is restricted as they are not US-based insurers.

Hiscox Inc., a Delaware corporation headquartered in New York, d/b/a Hiscox Insurance Agency in CA, is a licensed insurance intermediary for admitted and surplus lines business. Hiscox Inc. underwrites on behalf of, and places business with, Hiscox Insurance Company Inc., other domestic insurers, and syndicates at Lloyd's (  Hiscox Insurance Company Inc. is a Chicago, IL domiciled insurer which is admitted or licensed to do business in all 50 states and the District of Columbia.

Inquiries as to insurance, products or services, other than those offered by Hiscox Small Business Insurance, should be directed to an insurance agent or broker licensed to conduct business in the relevant U.S. state. For further information about an insurer's ability to do business in the USA and US territories please contact a licensed agent or broker for advice.

This communication provides general information on Hiscox's products and services only and, except with regard to Hiscox Small Business Insurance, is not intended to be, and does not constitute, a solicitation of business by syndicates at Lloyd's from or in respect of the USA or U.S. territories. The information contained herein is not a part of an insurance policy, and may not be used to modify any insurance policy that might be issued. In the event the actual policy forms are inconsistent with any information provided herein, the language of the policy forms shall govern.

About Hiscox Small Business Insurance

Hiscox is the first company in the U.S. to offer insurance coverage for professional services businesses with 10 employees or less direct, online, and in real-time. We provide professional liability, general liability and business owners insurance, underwritten by Hiscox Insurance Company Inc.  We also offer workers' compensation insurance provided by EMPLOYERS®.  Hiscox Insurance Company Inc. is rated 'A' (Excellent) by A.M. Best Company.

Quote and buy customized coverage online at or by calling a Hiscox licensed advisor at (888) 202-3007 (Mon-Fri, 8:00 AM -10:00 PM EDT).

About Employers Holdings, Inc.

Employers Holdings, Inc. (NYSE: EIG) is a holding company with subsidiaries that are specialty providers of workers' compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company. Additional information can be found at:

EMPLOYERS® and America's small business insurance specialist® are registered trademarks of Employers Insurance Company of Nevada. Workers' compensation Insurance is offered through Employers Compensation Insurance Company, Employers Insurance Company of Nevada, Employers Preferred Insurance Company, and Employers Assurance Company. Not all insurers do business in all jurisdictions.


Coverages are subject to underwriting and may not be available in all states.  As of December 31, 2010, Hiscox Insurance Company Inc. had admitted assets of $67,630,365 and policyholders surplus of $55,085,042. Total liabilities were $12,545,323 (inclusive of $1,968,156 in  reserves) and paid up capital stock was $4,200,000.