80% of Small Business Owners Optimistic, Still Face Risks

Small Business Insurance

Survey data published by the National Small Business Association (NSBA) appears to reflect a growing optimism among small business owners, tempered by a few notable concerns.

As reported by AP, “[e]ighty percent said they were very or somewhat confident about the future of their businesses, up from 72 percent.” A further two-third expected to see a revenue increase in the coming year. This growing optimism is tempered by survey data published in a different NSBA survey which indicates many businesses are still concerned over regulatory costs that average around $12,000 annually for small businesses.

ACA Repeal’s Impact on Workers Compensation Costs

Workers Comp ACA

Since its proposal and eventual passage, President Barack Obama’s signature legislation has been a focus point for politicians on both sides of the aisle. Most Republican candidates vowed to repeal the law during the 2016 election cycle. Newly elected President Donald Trump and congressional Republicans are now working toward completing this campaign promise.  While businesses may see some cost benefits associated with a cutback or full repeal, there may be some unintended consequences associated with the move.

As reported by CBS affiliate WFMY News, one of those consequences to business may be felt in Workers Compensation costs. While WFMY simply provides this as a supposition, there is some notable data related to the issue.

2.2M Texas Women Uninsured, Workers Compensation Not Stepping In

Texas Insurance

A recent article published online by the Dallas News highlights an ongoing issue in Texas related to women’s health: 2.2 million women and girls in the state still lack adequate health insurance. However, the problem extends beyond just access to health insurance. Texas is one of only a small number of U.S. states where Workers Compensation is not commonly required. This issue may be compounding issues for many uninsured women in Texas.

According to the National Federation of International Business (NFIB), Texas only makes it mandatory for employers to purchase Workers Compensation coverage under very limited conditions, including “construction contracts for government entities”.  For many women in Texas, this may mean that a workplace injury not only results in a significant loss of income but when such injuries occur while uninsured, many women may face significant financial hardships as a result.

US Castings: Small Business Journey & Insurance

US Castings Insurance

Gathering data and learnings from others in order to improve is of particular importance for us at CoverWallet. The best way to create outstanding experiences for our clients and partners is to gather research and continuously iterate, and CoverWallet takes pride in delivering exceptional insurance for businesses nationwide.

We had the opportunity to speak with Lauren Asher, the operations manager at US Castings. She gave us great insights into how US Castings was started, how the company has evolved, and their experience of finding insurance.

Insurance Company, Lloyd’s of London, Bans Employee Drinking

Lloyd's of London Underwriting

While most employers encourage a bit of social drinking among employees, some workers at UK-based insurance company Lloyd’s of London balked at a new ban the company handed down regarding on-duty drinking. The company’s ban is in response to an internal report which found that alcohol was a common factor in nearly half of disciplinary actions.

According to Insurance Business Magazine, this rule does far more than implement warnings: employees found drinking or under the influence of alcohol during work hours could be fired outright. The new policy, which released to employees through an internal memo and later leaked to the media, was not taken well by Lloyd’s employees.

Small Business Insurance Q&A – Unique Flavors Jah-Merican Sauces

Sauce Insurance

At CoverWallet, we’re continuously learning and improving upon what is established, similar to the many entrepreneurs and small business owners we work with. One of the ways we do this is through highlighting the insights and experiences of our own clients.

Ultimately learning from these entrepreneurs helps us out at CoverWallet, but it also can help out all business owners by helping them understand, through the experience of other people, the importance of insurance in business.

We had the privilege of speaking with Oral Thompson, owner of Unique Flavors Jah-Merican Sauces, to talk about his company and their insurance experience with CoverWallet.

Economic Concerns Rise as Fewer Small Businesses Launching

Entrepreneurship Decline

Most politicians place a heavy emphasis on small business as the backbone of the U.S. economy. Both Hillary Clinton and President Donald Trump openly courted small businesses in the run up to the election, promising everything from lower taxes to fewer regulations. Indeed, this certainly makes sense as a strategy. According to the Small Business Association, small businesses employ 48% of the U.S. workforce, or just under 57 million people.

Nevertheless, starting a small business has and always will be a risky venture. Despite growing confidence among small businesses, many still fail for a number of reasons. Whether it’s because of a crowded industry (such as restaurants) or a dramatic change in technology that leads to a decrease in demand for a product, small businesses always assume some level of risk.

Most Small Businesses (51%) Not Investing in Cyber Risk Mitigation

Cyber Insurance

A number of reports from leading cyber security companies indicated a rise in threats between 2015 and 2016. The 2016 Ponemon Cost of Data Breach Study found the average total cost associated with a data breach also increased, from $3.8 million to $4 million per event.

If Yahoo is any example, it’s nearly impossible for even the largest companies to keep their records safe, particularly when hackers are capable of using increasingly creative methods to steal data. Even with that threat, a large number of small businesses are not allocating funds to protect against these threats. Small Business Trends reports that 51 percent of small businesses are not actually investing in risk mitigation.

69% of Business Owners Planning Exit, but May Not be Prepared

Limited Liability

Despite forecasts to the contrary from a decade ago, many baby boomer business owners have held onto their businesses far longer than expected. Nevertheless, a 2014 Business Enterprise Institute (BEI) study found that more baby boomers are finally planning their sell their businesses and retire. The BEI found that that 69% of business owners have plans to exit their business within the next 10 years.

Although this certainly provides some relief for young entrepreneurs looking to acquire businesses, those boomers planning to leave appear to be ill prepared to do so. A recent Forbes article reports that the Exit Planning Institute (EPI) has troubling news, both for those who might hope to acquire a business and those looking to sell: most soon-to-retire owners have no exit strategy.

Tech and Professional E&O Insurance Rates Declining in 2017 Outlook

Tech Professional E&O Rates

In its 2017 Insurance Market Outlook, Wells Fargo provides a mixture of positive and negative news for businesses. Positively, Wells Fargo described 2017 as a “continued buyer’s market.” However, the report also indicates that some forms of insurance are increasing. Notably, Workers Compensation costs in Oklahoma may be increasing following an Oklahoma Supreme Court ruling that found employer opt-out to be unconstitutional. Meanwhile, companies have experienced an increase in securities class action lawsuits, as well as an increased focus on cyber crime as high-profile breaches continue to occur.