How Independent Agents Can Help Small Businesses Close Coverage Gaps  

• August 24, 2026

By Katie Sommer  

For many small business owners, purchasing a business owners policy (BOP) feels like checking an important box. The product has long been a cornerstone of small business insurance, combining property, general liability and business income coverage into a single policy. It is often one of the first insurance purchases a company makes and for a good reason.  

However, as the risks facing small businesses change, insurance professionals increasingly emphasize an important reality: a BOP is a strong foundation, but not a complete risk management solution. Several significant exposures commonly are beyond what a BOP covers.   

For independent agents, that reality presents a valuable opportunity. Helping customers identify and address coverage gaps can strengthen client relationships while reinforcing the agent’s role as a trusted advisor.   

Here are four insurance gaps agents can highlight for their clients:  

1) New risks are exposing old assumptions. Many small business owners assume that having a BOP means most of their insurance needs are covered, which is an opportunity to tell them about other risks that require separate insurance coverage.   

Professional liability is one of the most common risks not covered by standard small business insurance in a BOP. Businesses that provide advice, expertise or professional services may face allegations involving errors, missed deadlines or work that failed to meet a client’s expectations. Even when claims lack merit, the cost of a legal defense can be substantial. Because these exposures generally are not covered under a standard BOP, many businesses will need professional liability or errors & omissions insurance.   

Workers compensation is another area where misconceptions arise. Some business owners mistakenly assume a BOP provides protection for employee injuries, but workplace accidents, medical expenses and lost wages typically require separate workers comp coverage. As businesses grow and add employees, addressing those exposures becomes increasingly important.   

These conversations create opportunities for agents to move beyond policy discussions and help clients better understand their overall risk profile.  

2) Cyber moves to the forefront. Few exposures illustrate the changing risk landscape more clearly than cyber risk. Small businesses have become increasingly attractive targets to cybercriminals, yet many owners remain unaware that certain cyber incidents are not covered by a standard BOP.   

The financial impact of a breach often extends well beyond restoring technology systems. Businesses may face investigation costs, customer notification expenses, legal fees and lost income resulting from operational disruptions.   

In response, insurers have expanded the options for customers. A common solution is a cyber endorsement that can be added to a BOP, as well as standalone cyber policies that provide broader protection. Coverage may help address risks like data loss, system restoration and business interruption resulting from cyberattacks.   

For independent agents, cyber coverage has become an essential conversation regardless of industry. Whether a company is a restaurant, retailer, contractor or professional services firm, chances are the business maintains digital information, such as electronic payments from customers or to employees. The question is no longer whether a business relies on technology, but whether its insurance protection reflects that reality. 

 3) Property risks still drive major losses. Traditional property risks continue to generate some of the most severe losses facing small businesses. Fire damage remains the costliest small business claim, averaging approximately $80,000, according to The Hartford’s claims analysis. The insurer also found that losses involving owned property are often twice as costly as those occurring at non-owned locations.   

These findings underscore the importance of regularly evaluating property values and coverage limits. Inflation, rising construction costs and equipment replacement expenses can all contribute to underinsurance if policies are not updated to reflect changing conditions.  

Agents should also remind clients that certain catastrophic events, including floods and earthquakes, are not covered under a standard BOP. Depending on the location and operations, specialized coverage may be necessary. As weather-related events continue to affect businesses across the country, flood exposure is becoming an increasingly important risk management discussion, even outside traditional flood zones.   

4) Commercial auto remains an overlooked exposure. Many small businesses use vehicles for deliveries, transporting equipment or traveling between job sites. Yet auto-related losses generally fall outside the protection provided by a BOP. Commercial auto insurance may be needed to help cover vehicle damage, injuries and liability arising from work-related driving activities.  

These exposures often emerge as businesses expand. A company that began with a single owner may eventually add employees, increase travel or operate multiple vehicles. Routine coverage reviews can help identify transportation-related risks before a loss occurs.  

The Importance of Coverage Reviews   

Beyond individual coverage categories, policy limits themselves can create vulnerabilities. A business may experience a covered loss only to discover that insurance limits no longer reflect the true cost of replacing equipment, inventory or other assets.   

That reality is driving a broader industry emphasis on regular coverage reviews. As operations evolve, insurance programs should evolve as well. For independent agents, those discussions represent an opportunity to demonstrate expertise, deepen relationships and help clients make informed decisions about risk. 

Katie Sommer is a small business insurance product manager at The Hartford.