Unique risks for evolving industries

As a valued partner in protecting the dreams of small and medium-sized businesses (SMBs), we wanted to help identify and explore the hurdles that each agent, carrier, SMB owner, and successful entrepreneur faces in a post-pandemic world. In this introductory post for our 2025 educational series, we’ll delve into the socio-economic impacts of COVID-19 and how it upended the work environment, creating new challenges, risks, and opportunities for entrepreneurs, carriers, and agents.

A post-Covid workforce full of successful entrepreneurs and small business owners 

Our workforce and our work environment changed materially post-Covid. The pandemic shifted how and where we work. Many professionals, such as IT consultants, can now work remotely. It also opened new avenues for people to create new income streams. For example, a jewelry artist who started an online retail business selling products that were merely a hobby before the pandemic might now be a successful entrepreneur. 

It also spurred economic growth in unexpected ways, such as in spending habits, like pet care. Did you know that nearly one in five households acquired a pet during the pandemic? All those new pet owners spent a considerable amount of money on pet goods and services, giving the pet industry a significant economic boost. 

Successful entrepreneurs adapted and responded quickly to these new circumstances and market demands. SMB support systems, like insurance carriers and agents, must adapt swiftly as well.

New business is booming

The final analysis of these trends is not yet complete, and the dust hasn’t settled. But the early data is clear. We are experiencing a substantial business boom in new businesses started by successful entrepreneurs compared to pre-pandemic levels.

According to the US Chamber of Commerce’s Map: New Business Applications Surge Across the Country, “Entrepreneurship is booming in the United States. Over the last few years, the number of applications filed to start new businesses has surged. Application numbers doubled in 2020 compared to recent years, and 2021 and 2022 saw over 5 million applications filed, according to the U.S. Census Bureau.” 

And the substantial upward trend continued. In 2023, a record-breaking 5.5 million new business applications were filed, compared to pre-pandemic years’ average of 4.7 million applications. According to the Commerce Institute, “The total number of businesses started in 2023 also represents a 56.7% increase from the number of new businesses in 2019.”

Why the boom and why now?

Early analysis reveals a myriad of reasons why and how the pandemic opened doors for new business owners to become successful entrepreneurs. Here are just a few:

• Flexible work styles coupled with the pressures of higher cost of living enabled entrepreneurs to unlock multiple, simultaneous streams of income. 
• The ease of access to technology and digital connectivity enabled innovation at an unprecedented pace. This gives smaller operations the tools to grow quickly and compete with much larger entities.
• Consumer preferences evolved, as did their ability to shop how, when, and where they want.
• Those that were laid off or furloughed, during or as a result of pandemic shutdowns, were able to reevaluate their work relationships. Introspection led them turning their ideas or hobbies into businesses that could operate from home (or anywhere else).

Entrepreneurship creates opportunities for everyone

Small businesses continue to be the long pole in the tent for the US economy, with “99.9% of US businesses classified as small businesses,” according to a 2023 U.S. Small Business Administration report. The pandemic only fortified their role in our ecosystem. These small businesses are the embodiments of individual passions and dreams. They need protection in order to flourish. As outlined above, the many individuals who responded quickly to an evolved work landscape post-COVID also became successful entrepreneurs. Their insurers need to respond too. With the right tools, resources, and knowledge base, agents can target and address the massive growth opportunity that lies within this customer base. 

Getting the right protection is a team effort. Well-educated agents can become invaluable resources and partners in a small business’ success. In July 2024, NEXT Insurance surveyed 1,500 U.S. entrepreneurs aged 18-64 on business investment plans and profitability.  Interestingly, “only 10% will invest in risk management (safety and insurance). This is consistent with previous NEXT survey results and the lack of education surrounding risk and insurance. (40% of business owners say it’s more stressful to understand insurance than taxes).” 

Successful entrepreneurs coming out of the pandemic are often new to the complexities of commercial insurance. The hesitation to understand insurance creates an opportunity for commercial agents to demystify it. According to the same NEXT survey referenced above, “53% of small business owners said their greatest barrier to getting insurance coverage is simply knowing what kind of insurance package their business needs.” Closing the education gap will be key for agents in order to capitalize on the new business boom.

It’s also important to note that most of these pandemic-born entrepreneurs undoubtedly have personal insurance already. In the Bold Penguin Evolving Risks Of Small Businesses introduction, we wrote, “Acquisition and retention opportunities exist for the un- and underinsured U.S. small businesses. Many of the reticent small business owners already have personal insurance policies with agents and brokers that carry the commercial insurance that these SMBs could benefit from. With these relationships already in place, the opportunity [for growth] is heightened.”

Demystifying unique risks for the successful entrepreneur

Based on all the above, we can draw a few conclusions: 

1. The new class of successful entrepreneurs emerging from the pandemic represent a huge growth market for carriers and agents. 
2. Just as these business owners pivoted quickly to fill new market needs, carriers and agents must follow suit to support them. 
3. Understanding and addressing these business owners’ unique needs will be critical for agents’ success. 
4. Education and protection for the entrepreneurs' dreams will be critical to their success. 

We are eager to share our insights about evolving industries and risks in a post-pandemic work environment. We look forward to the Unique Risks For Evolving Industries series contributing to our partners’ success. In July 2025, the complete Unique Risks For Evolving Industries 2025 Report will be downloadable at www.boldpenguin.com.

Contact Bold Penguin with questions about this series or how we can work together.