New York (PRESS RELEASE – February 25, 2011) – Small business owners listed their biggest mistakes in a new survey by specialist insurer Hiscox. The Hiscox USA Small Business Survey found the top four mistakes when setting up a business are:
- underestimating monthly expenses (32%),
- hiring the wrong people (20%),
- not knowing how to market and sell your product (18%),
- not securing enough financing (18%).
The research also highlights the gaps in knowledge small business owners face when taking the leap and starting their own business. These include not understanding enough about the impact of taxes (33%), financing and credit (26%) and hiring and firing (24%).
“People who take the leap often have great energy and passion for their area of expertise. They have a clear goal, but as they embark on their journey they may not foresee the bumps along the highway. Cash flow, human resources, marketing and insurance issues can seem boring, but are hugely important,” said Kevin Kerridge, Small business insurance expert from Hiscox USA.
“Any professional starting their own business, whether a young IT consultant or an experienced marketer, has a very clear vision of the service and value they will bring to their client base,” Kerridge said. “But, if you don’t plan for the basic essentials of running a business like getting the right contract in place for your employees, or having appropriate insurance that covers the specific risks of the industry you’re in, you could be very quickly going back to being an employee.”
The biggest mistake a small business owner can make when purchasing insurance is not understanding what their insurance policy covers, according to 37% of respondents. Understanding what their insurance covers is important as 72% of respondents agreed that small businesses need insurance the moment their business is launched. Respondents also said that not doing research on rates (17%) and not buying a policy that is customized for their industry (16%) were other top mistakes small businesses make when purchasing insurance.
Designed specifically for the small and home-office market, Hiscox Small Business Insurance is customized for a range of knowledge-based professions including IT, management consulting, business consulting and marketing. Hiscox offers professional liability insurance (errors and omissions) and general liability insurance for small businesses. Hiscox also offers workers’ compensation insurance provided by EMPLOYERS.
About Hiscox in the U.S.
Hiscox, the international specialist insurer, is headquartered in Bermuda and listed on the London Stock Exchange (LSE: HSX). There are three main underwriting parts of the Group – Hiscox London Market, Hiscox UK and Europe and Hiscox International. Hiscox International includes operations in Bermuda, Guernsey and the USA. Hiscox ASM Ltd, Hiscox Underwriting Ltd and Hiscox Syndicates Ltd are authorized and regulated by the UK Financial Services Authority. The ability of syndicates at Lloyd’s to do business in the USA and its territories are restricted as they are not US-based insurers.
About Hiscox Small Business Insurance
Hiscox is the first company in the U.S. to offer insurance coverage for professional services businesses with 10 employees or less direct, online, and in real-time. We provide professional liability, general liability and business owners insurance, underwritten by Hiscox Insurance Company Inc. We also offer workers’ compensation insurance provided by EMPLOYERS. Hiscox Insurance Company Inc. is rated ‘A’ (Excellent) by A.M. Best Company.
About Employers Holdings, Inc.
Employers Holdings, Inc. (NYSE: EIG) is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company.