Market research firm Forrester examined the insurance buying data of small businesses in the U.S. from 2014 to 2018 to determine which insurance lines are contracting and which ones are expanding. The findings reveal that purchases of workers’ compensation insurance have declined because of the changes in the labor market. It dropped from 69% in 2014 to 47% in 2018.
Purchases of business owners’ policies (BOP) and commercial general liability (CGL) also dropped because of rate increases. The percentage of small business owners with BOP coverage fell from 52% to 45%. For CLG, it was down from 61% to 54%.
On the other hand, changing risks and economic concerns stimulated the increase in buying personal and business liability coverage. The percentage of small entrepreneurs who purchased business interruption coverage increased from 19% to 28%. The purchase of errors and omissions (E&O) and directors and officers (D&O) insurance also increased.