Small business insurance is one way to lighten up the overall gloomy forecast overcoming today's business environment.
After reaching its highest point this year in May, confidence among small-business owners dropped in June, according to a report from the National Federation of Independent Business. As a result, many companies are driving up their prices and losing valuable customers.
The NFIB revealed a 0.9 percent drop in its "Small Business Optimism Index," falling from 94.4 in May to 93.5 in June. The index measures a variety of confidence factors among small-business owners each month, such as sales expectations, economic forecasts, hiring plans and credit conditions.
According to the NFIB, the current index is still higher than its lowest point during the recent Great Recession, but it remains 7 points below the pre-recession average. While most factors contributing to small-business optimism reported overall decreases, the report identified a modest increase in forecast for hiring.
"Economic growth was revised down for the first quarter of the year and the outlook for the second quarter is not looking good," NFIB Chief economist Bill Dunkelberg said in a statement from the organization. "Nothing cheers up a small-business owner more than a customer, and they remain scarce and cautious while consumer spending remains weak and more owners are reporting negative sales trends than positive ones."
Despite the relatively dreary economic outlook, there are still several ways for entrepreneurs to decrease business risks in other more controllable areas.
Professional insurance policies are an effective way to alleviate much of the risks associated with the overall business climate these days. According to Entrepreneur, a basic business owner's policy can offer essential coverage for expensive damages such as data breaches, loss of software and theft.
Other types of policies include professional liability and errors & omissions insurance and can come in as equally valuable in today's business environment.
According to Forbes, all small-business owners should consider the benefits of professional liability insurance because it can protect them from negligence claims and other costly legal issues.
Businesses can choose the most appropriate insurances policies by closely examining their assets and determining key information such as net worth, likelihood of business interruption and any particular aspects of their operations that may be prone to liability issues. Entrepreneur said businesses should also review their policies annually to account for any changes within the company or overall business model.