Black entrepreneurship is booming, but as more founders move from side hustles and home-based operations into larger companies, protecting that growth is becoming just as important as achieving it.
New Census Bureau data shows that Black-owned employer businesses — companies with at least one paid employee — reached about 201,000 in 2023. Those businesses generated $249 billion in receipts, employed nearly 1.9 million people, and paid $69.8 billion in annual payroll. Meanwhile, Brookings found that the number of Black-owned employer businesses increased 62% from 2017 to 2023. Business equity has also contributed significantly to gains in Black wealth, making business preservation an important part of the broader wealth-building equation.
However, insurance coverage that made sense when a business was smaller may not be enough once the operation expands. In light of Black Business Month in August, U.S. News shared three insurance gaps fast-growing small businesses may face, and how to avoid them.
1. General liability isn’t the whole package
General liability coverage can help protect against claims involving bodily injury, property damage, and certain lawsuits. But it generally doesn’t cover every risk associated with a growing company’s physical and digital assets.
An entrepreneur with a storefront who adds inventory or purchases expensive equipment
may need commercial property coverage. Businesses holding customer or employee information may also want to consider cyber liability coverage for expenses associated with data breaches and cyberattacks.The U.S. Small Business Administration recommends that owners assess the risks they couldn’t reasonably afford to cover out of pocket and select insurance accordingly.
2. Workers’ comp won’t cover every workplace dispute
Workers’ compensation covers work-related injuries and illnesses, but it isn’t intended to cover employment-related lawsuits alleging issues such as discrimination, harassment, or wrongful termination. As teams grow, entrepreneurs may consider employment practices liability insurance, or EPLI, to help address certain employee claims and associated legal costs.
3. Professional mistakes can become expensive
Consultants, agencies, financial professionals, technology companies, and other service providers can face another risk: a client alleging that their advice or work caused financial harm.
That’s where professional liability, often called errors and omissions insurance, can become relevant. The SBA lists professional liability as coverage for businesses providing services to customers against financial losses tied to malpractice, errors, or negligence.
For Black entrepreneurs building companies that can support families for generations, an annual insurance review should be part of the growth plan — not an afterthought. A practical audit starts with documenting newly acquired assets, updating employee and payroll information, and reviewing coverage with an insurance professional who understands the company’s industry.
The goal isn’t simply to insure a business. It’s to make sure the equity being built today has a better chance of becoming the legacy that lasts tomorrow.
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