Yet Most Lack Insurance
A new survey from The Hartford found that 25% of Americans — approximately 57 million people — own a side business (a business that is not their primary source of income), yet most don’t have insurance to protect it. Only 12% of side business owners in America have purchased insurance. Of those who have not purchased insurance: 91% do not plan to purchase.
“We were somewhat surprised to see how many Americans are operating side businesses largely to generate extra income, yet most are uninsured,” Stephanie Bush, The Hartford’s head of small commercial and personal lines, said in a statement. “These survey results highlight the need to ensure that small business owners have access to resources to understand when insurance protection makes economic sense.”
Insurance? Who needs it
While a majority (61%) of respondents overall said the primary reason for starting a side business was financial, many were willing to forego insurance. The top three reasons cited:
- I don’t need business insurance (44%)
- My business is too small to warrant buying insurance (18%)
- I am protected by my current home or auto insurance (11%)
At the most basic level a small business insurance policy helps protect a company’s property and income, and safeguards against liability claims. As a small business grows, additional insurance coverage options are available to meet the unique needs of the business — including workers’ compensation, commercial auto and data breach coverage.
Side businesses are side businesses for a reason
Although the small business owners surveyed are looking to make extra income, it’s not enough for some to take their business full-time. Millennials (40%) are more likely to say that their side business could become their full-time job compared with baby boomers (38%) and Gen X (33%).
However, many owners cite numerous barriers regarding making their side business their primary source of income:
- I don’t believe I can make a living at this business – 48%
- I can’t afford to give up my income from my full-time job – 33%
- I don’t want to give up the benefits from my full-time job – 27%
- I like my full-time job and don’t want to give it up – 23%
- I don’t have the time to dedicate to the business – 13%