2023 Small business insurance market update

In addition to economic challenges and the lingering impacts of the pandemic, small businesses are grappling with shifting consumer expectations, labor shortages, supply chain disruptions and increased catastrophe activity. (Downtown Provo, Utah/Sean Pavone 2020/Adobe Stock)

Economic uncertainty is top of mind for all businesses but especially for small business owners, many of whom are taking a close look at all of their expenses, including insurance. Emerging from the pandemic, the economic climate remains volatile, with near double-digit inflation and rising interest rates hitting small businesses particularly hard.

According to Nationwide’s recent Agency Forward survey of business owners, most small business owners have a pessimistic outlook on the direction of the overall U.S. economy. But 72% expect conditions for their own business to be favorable in 2023, says J.J. Perez, president of Nationwide Corporate Solutions. More than half of small businesses (58%) indicated they struggle with managing the impacts of inflation on their business, and about two-thirds (68%) believe inflation will have an even greater impact on their business in 2023.