More than a third of US entrepreneurs have used an AI chatbot or search tool to research business insurance options, nearly matching the share who have consulted a human insurance agent, according to new research from ERGO NEXT Insurance, the digital-first small business insurer formerly known as NEXT Insurance.
The findings come from the first installment of the company's three-part Building Through Uncertainty research series, based on a survey of 501 new and established US small business owners.
Thirty-six percent (36%) of respondents said they had used an AI tool to explore coverage options, compared with 31% who had consulted an agent. Among those who used AI for insurance guidance, 94% said they trust the information they received, and 31% said they trust AI tools more than traditional sources entirely, with 63% saying they trust both about equally. Only 7% said they trust AI less than a human source.
The survey found small business owners entering the market today with a sharper sense of risk than earlier generations, without that awareness undermining their confidence in their own prospects. Thirty-three percent (33%) said they worry about their business closing at least once a week, yet half remain confident they will still be operating five years from now.
New business owners in particular expect conditions to get harder: 80% expect business risks to increase over the next one to two years, compared with 53% of established owners. Economic downturn and inflation ranked as the top concern overall at 46%, followed by cyberattacks and data breaches at 27%.
Effi Fuks-Leichtag, chief product officer at ERGO NEXT Insurance, said that growing risk awareness hasn't dented entrepreneurial confidence.
"They continue to believe in themselves and the future of their businesses, but long-term success increasingly depends on having access to technology and trusted advisors that help them understand what protection they need and how that changes as they grow," Fuks-Leichtag said.
Despite that heightened awareness, coverage adequacy hasn't kept pace. ERGO NEXT found that 73% of small businesses carry no insurance or less coverage than they need, and only 37% of those with coverage strongly agree they regularly review and update it as their business grows. Coverage is notably more common among newer businesses than established ones, with 82% of businesses in their first year carrying at least some insurance compared with 67% of businesses two to five years old, suggesting the earlier-buying trend the survey identifies hasn't yet translated into adequately maintained coverage over time. Among businesses that remain uninsured, half cite cost as the barrier and 20% cite confusion about what coverage they actually need.
That gap tracks closely with broader industry data on small business underinsurance. A 2025 Hiscox report found 77% of US small businesses were underinsured, a two-point increase from 2023, while Munich Re has estimated roughly 75% of small businesses nationally are underinsured against an addressable US small business insurance market of approximately $175 billion.
Philip Natoli, chief actuarial officer at ERGO NEXT, said the challenge lies in converting awareness into action.
"The challenge is turning that awareness into protection that keeps pace with their businesses, which requires a combination of technology and human expertise to help them make more informed decisions as their risks evolve," Natoli said.
The nearly even split between AI tools and human agents as a starting point for insurance research reflects a trust shift Insurance Business has tracked more broadly across the industry this year.
A separate survey found 84% of US consumers now use AI tools at least occasionally, with sentiment moving from skepticism toward judging AI on how it's deployed rather than whether it should be used at all, provided the technology comes with visible human oversight rather than replacing it outright.
ERGO NEXT's own findings point in a similar direction: entrepreneurs appear comfortable using AI as a starting point for straightforward questions while still turning to agents for more complex coverage decisions, suggesting the near-term shift is additive to agent relationships rather than a replacement for them.
For agents and brokers serving the small business segment, the data suggests AI tools are becoming a genuine first stop for coverage research rather than a niche behavior, meaning a prospective client arriving at a broker's office increasingly may have already formed views about their coverage needs based on an AI conversation.
That shifts the value of the human agent relationship toward validating and refining an already-informed starting point, rather than beginning the conversation from scratch, particularly for the 73% of small businesses ERGO NEXT found carry inadequate coverage despite growing risk awareness.
Brokers may find more traction addressing the specific barriers cited by uninsured business owners directly, cost concerns and coverage confusion, rather than assuming risk-awareness campaigns alone will close the protection gap this survey identifies.
