While 92% of respondents have never filed for bankruptcy, most lack the business insurance that can protect them from future financial hardship. Only 28% of business owners have a business owner’s policy, which offers slip-and-fall lawsuit protection and commercial property coverage.

Of the 8% of business owners who have filed for bankruptcy, the majority (64%) filed because of personal issues. Survey respondents also filed for bankruptcy because of lost customers (18%) and lawsuits (18%).

Here are key insights from the poll:

92% of respondents have not filed for small business bankruptcy.

98% of respondents do not think they will need to file for bankruptcy in the next six months.

28% of respondents have a Business Owner’s Policy, and 21% are protected by Professional Liability Insurance/E& O Insurance.

How Business Insurance Can Help Prevent Bankruptcies

Though only 8% of the small businesses surveyed have filed for bankruptcy, economic downturns and personal issues could force business owners to make tough financial calls. Trends show that business bankruptcy filings are on the rise and increased by 26% in 2016.

Now consider that of the businesses that filed for bankruptcy, 18% did so because of a lawsuit. In many cases, the appropriate business liability insurance can pay for the legal expenses that would otherwise force a small business to shutter.

For example, a customer slip-and-fall lawsuit typically costs $20,000. If a business owner must pay for that expense out of pocket, it’s easy to see why bankruptcy might be their only option.

The poll shows many small businesses are uninsured or underinsured, which leaves them vulnerable to business bankruptcy caused by lawsuits. Adequate small business insurance is one way they can proactively protect their businesses from this eventuality.