10 Things to Know About Small Businesses

January 26, 2015
  1. The most common insurance policy for small businesses is the Business Owners Policy (BOP). Small- to medium-sized businesses must meet certain criteria to be eligible for a BOP. Eligibility factors often include the number of employees and size of the business – typically fewer than 100 employees and less than $5 million in gross annual sales – the required limits of liability, the type of business and the extent of offsite activity. – Insurance Information Institute
  2. Coverage under the BOP is limited to 12 months of protection; and unless endorsed otherwise, ordinary payroll is limited to 60 days and extended business income is limited to 30 days. – Christopher J. Boggs, vice president of education, Insurance Journal Academy of Insurance
  3. Currently, 33 companies list Business Owners Policy, or BOP, in the title of their product listing on www.mynewmarkets.com; 97 more companies have BOP listed as a coverage in product descriptions that do not include BOP in the listing title. – MyNewMarkets.com
  4. One benefit of the BOP is the automatic 25 percent seasonal increase for business personal property. However, with this extension of coverage, the business personal property limit must equal 100 percent of the average monthly values on hand for the 12 months (or the length the insured has been in business, whichever is less) immediately preceding the loss. This means that the value used for the current year has to include the seasonally increased values of the year prior. – Christopher J. Boggs, vice president of education, Insurance Journal Academy of Insurance
  5. Overall premium in the small business market came to $81 billion in 2013, according to a report issued in November 2014 by Conning. Even without including specialty and high-hazard businesses, the principal small business market premium amounted to $58 billion, or 20 percent of the U.S. property/casualty commercial market premium, according the report, “The Small Business Sector for Property-Casualty Insurance: Market Shift Coming.” – Conning
  6. The principal small business insurance market is expected to grow from $58 billion premium in 2013 to $63 billion in 2018, or 8.4 percent. No one insurer currently holds more than 6 percent of the market for small business premium. – Conning
  7. Forty-one percent of small business commercial insurance customers with 50 or fewer employees added commercial insurance with their predominantly personal lines insurer after first having their personal insurance with that insurer, according to the J.D. Power 2014 U.S. Small Business Commercial Insurance Study, released in August 2014. – J.D. Power
  8. Volunteers – both men and women – spent a median of 50 hours on volunteer activities during the period from September 2012 to September 2013. – U.S. Bureau of Labor Statistics
  9. Small businesses make up: 99.7 percent of U.S. employer firms; 63 percent of net new private-sector jobs; 48.5 percent of private-sector employment; 42 percent of private-sector payroll; 46 percent of private-sector output; 37 percent of high-tech employment; 98 percent of firms exporting goods; and 33 percent of exporting value. – U.S. Small Business Administration
  10. 55 percent of small businesses in the United States have experienced a data breach and 53 percent had multiple breaches, according to a 2013 survey of small businesses with annual revenues of less than $10 million conducted by the Ponemon Institute for The Hartford Steam Boiler Inspection and Insurance Co (HSB). Only 33 percent of those businesses notified the affected parties, even though 46 states require that individuals be contacted when their private information is exposed. – The Hartford Steam Boiler Inspection and Insurance Co.

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Insurance Journal West January 26, 2015
January 26, 2015
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