Protection Gap Report 2025

What is the protection gap?

The protection gap is the difference between the insurance a business has and what it actually needs – often caused by a business not buying all the insurance cover required.

Misconceptions of policy details can create protection gaps, leaving businesses exposed to risks they assume are covered. Compounding this, around a third of small businesses have not reviewed their policies in over three years, meaning their insurance may no longer reflect the scale or nature of their operations.

As risks evolve and businesses grow, underinsurance is emerging as a vulnerability that threatens both financial stability and long-term resilience.

What can business owners do to protect themselves?

The Hiscox protection gap report found that a lack of clarity around insurance coverage is giving owners a false sense of security. How can business owners take control:

Understand your personal risk landscape, what kind of business you own will influence what kinds of insurance you need to consider.
Reassess your insurance needs regularly, this will help to avoid not only underinsurance but also paying for cover you no longer need.
Stay updated on industry and risk trends, find ways to share knowledge and gain fresh insights by engaging with trusted sources.

Joanne Musselle, Group Chief Underwriting Officer

"This is about far more than having all the insurance policies your business needs or not having the right coverage limits in place. It’s about understanding the risks that small businesses can face and having the necessary tools in place to keep them safe. It’s about resilience in a world where risks are evolving faster than ever."

Introducing the Protection Gap Report 2025

Understanding your policies - are you protected?

While the Hiscox protection gap report has useful advice and resources, it’s vital to speak with a small business insurance specialist to make sure your business is adequately protected.

Find out more from your local team here