The “Insurance Gap” Crisis: Why 77% of Small Businesses Are Currently at Risk

The Invisible Risk in Your Business Plan

Small business revenue is growing, with over 62% of owners reporting increased earnings this year. As your business grows, your risk grows with it. A massive disconnect has emerged between business success and business protection. At Rollo Insurance, we believe that every story matters and your success is a story worth protecting.

We recently shared two alarming statistics on our Facebook page that every owner needs to consider:

• Nearly 30% of small businesses operate without any insurance coverage at all.
• Approximately 77% of insured small businesses are considered underinsured.

These are not just numbers. They represent thousands of businesses that could be one lawsuit or one natural disaster away from closing their doors. We believe in being proactive and diligent because your hard work deserves more than a “standard” policy that leaves you vulnerable.

Where These Numbers Come From

According to the 2025 Hiscox Underinsurance in Small Business Report, the rate of underinsured businesses has actually increased since 2023.

The study found that while businesses are scaling, they often fail to update their policies. For example, 39% of businesses that have been operating for ten years or more have never updated their General Liability insurance. As your business evolves, your protection must evolve too.

The 3 Biggest Gaps Leaving Texas Businesses Vulnerable

Based on industry data and what we see on the ground at Rollo Insurance, these are the primary reasons why that 77% figure is so high:

1. Revenue Growth Outpacing Coverage If your revenue increases by 20% or more, your liability exposure increases, too. Many owners view insurance as a task to check off once, but a policy written for a $100k business will not protect a $1M business. 

2. The “It Won’t Happen to Me” Fallacy A staggering 30% of small business owners forgo certain coverages like Cyber Insurance simply because they believe they are too small to be a target. In reality, small businesses are often preferred targets because their security systems are perceived as weaker.

3. Misunderstanding Policy Scope Many owners assume their General Liability policy covers things like professional errors or fire damage to owned property when those often require separate, specialized endorsements.

Don’t Be a Statistic: Close the Gap

The Hiscox report suggests that the most effective way to stay protected is to review your insurance every two years or whenever your payroll or revenue changes by 20%.

At Rollo Insurance, we do not want you to just “have a policy.” We want you to have the right policy. We are a “God, Family, Country” centered organization that exists as educators first. We mix and match coverage from over 200 carriers to ensure you get the best price for the best coverage.

As we say, “The Difference is Real,” and that difference is found in the details of your coverage limits and the strength of the relationship we build with you. Let’s make sure your insurance keeps up with your ambition.