Seventy-seven percent of small businesses in the U.S. are underinsured, an increase of over 2% from 2023, according to the
The report surveys 2,000 small business owners in the U.S. and 4,250 business owners internationally, June 18 through June 30, 2025. The research was conducted by Wakefield Research.
The majority of small business owners cannot describe the coverage included in a policy, according to the report. Seventy-four percent misunderstood what is coverage by a general liability (GL) policy. There has been an improvement in the understanding of GL coverage since 2023, there was a 9% increase in the number of business owners who can describe it. There are some misunderstandings of what is coverage by GL, some business owners think the policy covers fire and flood on their property.
"Small businesses are the heartbeat and soul of our communities, and in fact, shoulder our entire U.S. economy. They achieve the extraordinary every single day, and deserve to feel safe in the knowledge that their courage will be matched by their insurer and policy. The more knowledge they have about the risks they face and how specific policies match up, the safer their business. As an industry, we must continue to help business owners understand the differences between policies, omit alienating jargon, and encourage them to let us know when their business has changed."
Cyber risk seems to also be misunderstood. Seventy-five percent of small businesses in the U.S. have heightened exposure to cyber risk, which includes having a website, using online payments and using email. Thirty-nine percent of those small business owners who don't have cyber coverage also don't believe they need it because their system is secure. Thirty percent also believe they are too small for cyber incidents.
