Running a business isn’t easy, but it’s a passion for many. Gallagher conducted its second annual survey of 1,000 US business owners for an updated, in-depth look at what concerns them most and what keeps them up at night — whether it’s an issue close to home or on a global scale. One things remains clear: No matter the size of the business, owners worry about how outside influences will affect them.
According to the survey, 80% of business owners are worried their business insurance won’t cover a specific event or loss. And that makes perfect sense, since an overwhelming 84% with business-related insurance policies made a claim for their business in 2023.
Business owners’ top concerns
One of the top concerns business owners report is how the threat of extreme weather conditions (91%) or natural disasters will affect their business. Specific extreme weather events causing concern include flooding (41%), fires (39%) and earthquakes (37%).
Cyber attacks (69%) also remained a top risk for what worries owners, yet only 32% of business owners surveyed reported having Cyber coverage.
Supply chain disruptions (68%) was listed as another concern followed by US elections at 63%, and the impact election results may have on their business.
Questions about artificial intelligence (AI) were new to the survey this year. The survey found that an overwhelming majority (81%) of business owners want to maintain or even increase AI investments in 2024. With the continued integration of AI, businesses are poised to unlock new avenues for growth and efficiencies.
Despite the opportunities technology affords, many business owners are concerned about the risks, ranging from exposing sensitive information (37%) and regulatory risks (35%) to making their work obsolete (35%).
Financial growth was something a majority (80%) of respondents experienced over the last 12 months, including 27% who saw significant growth. Concerns about their business and growth have led nearly all business owners (96%) to put risk management strategies or practices in place for their companies. And as a result of this growth, 86% of business owners felt at least somewhat concerned about their ability to attract and retain talent.
A majority of business owners (53%) are more likely to be kept up at night worrying about their business than personal matters, which is lower than what was reported last year (58%). There’s no question business owners are working to protect their companies from unexpected disasters. Nearly all who have business-related insurance policies work with a Property Casualty insurance broker (94%). Their top reasons for doing so are to receive advisory expertise (48%) and risk management counsel (47%).
Owners value business insurance
Insurance continues to be an essential protective tool for business owners, with many looking to expand their coverage. With so many businesses seeing financial growth, they have more on the line and are more at risk. Business owners continue to recognize the importance of business insurance, with 89% saying it is very or extremely important (similar to the 91% who said the same in 2023.)
Nearly all (98%) have some form of business insurance to keep their company protected. Similar to last year, a Business Owners’ policy is the top type of insurance policy held (47%), followed by Property insurance (44%), and Professional Liability Insurance policies (41%).
As businesses evolve, owners must ensure they have the right insurance to keep pace with changes. Financial changes are the top reasons why owners would look to adjust their business’s insurance, including their business’s financial stability (41%), revenue (39%) and even the owner’s personal financial situation (33%).
Financial stability is even more of a concern for businesses with less than $50 million in revenue (48%, compared to 34% with $50 million or more). Given the financial growth that many companies have seen, nearly all (95%) are looking to expand or get new insurance coverage for their business. When they need to make changes or purchase insurance for their business, most owners prefer to go through an insurance agent (55%), while nearly two out of five (39%) go through a broker.
Gallagher has the expertise to help business owners protect what’s important to them while navigating changes in the market and their industry.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.