Top 5 Insurance Gaps Small Businesses Overlook-

A Quick Checklist for Owners and Office Managers

Running a small business means wearing many hats—sales, operations, HR, and everything in between. But one area that often gets overlooked is insurance. Many small business owners assume they’re fully protected, only to discover critical gaps when something goes wrong. To help you stay ahead, here’s a quick checklist of the top 5 insurance gaps small businesses often miss.

1. Cyber Liability Coverage

The Gap: Many general liability policies don’t cover data breaches, hacking, or cybercrime.

Why It Matters: Even a small phishing attack can compromise sensitive customer information and expose your business to lawsuits or regulatory fines. With more business being done online, cyber risks are growing every day.

Quick Check: Do you have a cyber liability policy (or a rider) that covers data recovery, breach notifications, and legal expenses?

2. Business Interruption Insurance

The Gap: Property insurance covers physical damage, but it doesn’t replace lost income if your operations are shut down.

Why It Matters: A fire, flood, or even extended power outage can halt business for weeks. Without coverage, you’re left covering rent, payroll, and expenses out of pocket.

Quick Check: Does your policy include business interruption coverage that accounts for fixed costs and lost income?

3. Employment Practices Liability (EPLI)

The Gap: Many businesses forget coverage for employee-related claims like discrimination, harassment, or wrongful termination.

Why It Matters: Even small teams can face HR-related claims, which can quickly become expensive. Legal fees and settlements often reach six figures.

Quick Check: Do you have EPLI coverage to protect your business and leadership from employee claims?

4. Key Person Insurance

The Gap: Most owners insure their property but not their people. If a founder, top salesperson, or other key individual is suddenly gone, the business can take a major hit.

Why It Matters: Losing a key person can disrupt operations, revenue, and investor confidence. Key person insurance provides funds to help keep the business stable during transition.

Quick Check: Who are the “must-have” people in your business—and are they insured?

5. Professional Liability (Errors & Omissions)

The Gap: General liability covers bodily injury and property damage—but not mistakes in professional services.

Why It Matters: If you provide advice, consulting, design, or services, a simple oversight can lead to costly claims. Many small businesses assume they’re covered when they’re not.

Quick Check: Do you have professional liability (E&O) coverage tailored to your industry?

Final Thoughts

Insurance gaps can be invisible until it’s too late. Owners and office managers should review their policies at least once a year and ask their agent tough questions. A quick audit today could save your business tomorrow.

✅ Action Step: Take this checklist to your next insurance review meeting and make sure your coverage truly fits your risks.