Online Business Insurance: A Growing Trend
Speed and convenience increasingly drive small business owners to embrace digital solutions for their operations, including insurance. A recent survey indicates a growing trend of these business owners turning to online platforms. These platforms allow them to research, compare, and purchase coverage without the need for an agent, offering a fully online experience.
NEXT conducted a survey of 1,500 small business owners across the United States in January 2025 to better understand the changing landscape of insurance purchasing. Here’s what the survey revealed.
Online Insurance Purchases Surge
The traditional methods of acquiring business insurance, such as in-person or phone meetings with an agent, are becoming less appealing for busy business owners. Digital methods, including fully online purchases and integrating insurance through online payroll and financial services, are gaining popularity.
According to the NEXT survey, 61% of small business owners now purchase their insurance online, either directly from an insurance company or through a financial service. This significantly outweighs the 40% who still use traditional brokers or agents. Moreover, a previous global survey by PwC confirmed similar findings, indicating that 48% of small businesses prefer to buy online.
The survey also showed that 50% of respondents buy insurance online directly from the insurance company, while 28% use comparison sites or apps. A mere 10% reported using a broker or agent’s website.
Researching Insurance Online
Small business owners are increasingly taking a self-directed approach to understanding their business insurance needs. NEXT’s survey showed that 24% of participants (approximately one in four) researched online before making their insurance decisions. This reveals a trend toward greater autonomy in the decision-making process. In contrast, only 17% relied on an insurance agent to provide them with the necessary information.
Insurers could address this shift by enhancing their digital presence, providing more educational resources, and producing guides to help business owners make informed choices.
Small business owners also relied on other sources for background information, with 13% consulting friends, family, mentors, and colleagues. Professional groups, trade associations, business schools, and learning programs were also important sources of information, with each one being a valuable source of assistance to 8% of respondents.
61% of small business owners are now buying business insurance online either directly through an insurance company or through a financial service.
Motivations for Buying Insurance
Motivation to buy small business insurance among survey participants is divided into three roughly equal categories, suggesting the need for flexible, tailored insurance solutions. The primary reasons for purchasing insurance include:
- Legal compliance (22%): Some owners seek the minimum insurance required to comply with regulations.
- Maximum protection (21%): These owners aim for the most comprehensive insurance coverage they can afford, investing in various insurance types.
- Selective risk coverage (21%): This group prioritizes policies that protect their operations from specific, targeted risks.
The findings suggest that insurers must offer flexible and customized insurance solutions that address small business owners’ different priorities, budgets, and risk tolerances. As the survey suggests, a one-size-fits-all model for business insurance simply does not work.
Interestingly, and consistent with previous NEXT survey findings, about a third of those questioned (36%) feel that they have no need of small business insurance in the workplace.
The Knowledge and Coverage Gaps
NEXT research has consistently shown that small business owners often lack sufficient knowledge about their insurance needs and may not have the necessary coverage. Past NEXT findings indicated that 90% of small business owners lacked confidence in the adequacy of their insurance. Further, 96% of owners could not demonstrate a basic understanding of general liability insurance, one of the most common policies.
Another study of restaurant owners conducted in early 2025, found that 38% lacked insurance, up from 29% the previous year. The most recent data shows that 36% of participants believe that small business insurance is unnecessary. This highlights a significant knowledge gap regarding the risks and benefits of coverage.
The lack of awareness leaves small businesses exposed to unforeseen risks and potential liabilities.
5 Tips for Maximizing Business Insurance
Small business owners need to take action to secure the right coverage. The following five tips can help:
- Use digital tools: Utilize online resources to compare policies and find quotes tailored to your needs.
- Request a customized policy: Don’t settle for generic coverage; customize your policies to best match your specific risks.
- Avoid paying for unnecessary coverage: This will help keep costs down.
- Seek transparency: Ask insurers for clear and concise explanations of policy terms, pricing, and claims processes.
- Understand your risk exposure: Obtain coverage beyond the legal minimum and conduct a risk assessment to define the appropriate level of coverage for your industry, location, and the nature of your work.
- Prioritize education: Look for insurers that provide educational resources and guidance to help make informed decisions.
