“Small-business owners need to understand the array of business risks they face, as well as how to protect themselves with the right insurance coverage,” said Walter Bell, NAIC president and commissioner of the Alabama Department of Insurance.

NAIC decided to expand its Insure U program to small business after research it did in March revealed that many small businesses–defined as those with fewer than 100 employees–are exposed to serious risks that could be mitigated by a better understanding of insurance options, according to Catherine J. Weatherford, NAIC executive vice president and CEO.

Insure U last year initially focused on the consumer at various life stages: young singles, young families, established families and empty nesters.

NAIC said findings that pointed to the need of small businesses to be educated on the need to understand and obtain insurance include the following:

o Only 59 percent of small businesses with fewer than 20 employees have workers' compensation insurance;

o Just 35 percent of small businesses have business interruption insurance.

o Twelve percent of small business owners/managers do not have health insurance coverage themselves;

o Twenty-two percent of small businesses said they have “key person” life insurance, 15 percent have “key person” disability insurance and 7 percent had both coverages, even though 71 percent said that they are “very dependent” on 1 or 2 “key” people;

o Fifty-five percent dropped health insurance; 18 percent property & liability insurance, and 12 percent workers' compensation insurance to reduce or offset other expenses.

Montana Commissioner John Morrison described the difficulty small-business owners in his state have in providing health insurance to employees and detailed Montana's solution which includes use of money from a tobacco suit settlement to make health care available.

In talking with small-business owners, according to Mr. Morrison, “most said that they could pay something, but not market cost.”

The Small Business Administration said that in 2005 there were approximately 25.8 million small businesses of 500 or fewer employees, according to Cathy Weatherford, NAIC executive vice president and CEO.

These businesses represent 99.7 percent of all employer firms; employ 50 percent of all private sector employees; pay more than 45 percent of total U.S. private payroll; and generated 60-80 percent of net new jobs annually over the last decade, according to Ms. Weatherford.

Insure U for small businesses is being launched during Small Business Week, sponsored by the SBA.