Whether you’re a current student or an alumni of an HBCU, launching and growing your own business is difficult. 

There are numerous things to think about, including your business model – it’s not just about what you sell, but how you make the company scalable – the customer experience, and financial management. One of the most important aspects of running a business effectively is protection. Specifically, liability protection.

According to a recent study, African-American-owned businesses account for only 2.2% of the employer-owned businesses in the US, with entrepreneurs starting businesses with only a third of the capital of their white counterparts. It’s a sad truth that not only makes the hill you’ll climb steeper, but makes your business far more vulnerable. 

That’s why it’s important to protect yourself. Below are several key things HBCU entrepreneurs should know about liability, and how to safeguard what you’re building from the very beginning.

Knowing the Percentages

In any given year, a significant portion of businesses in the US face lawsuits or threats of lawsuits. 

In another study, for instance, it was found that 90% of all companies experience a lawsuit at some point, with small companies, especially, being the main victims – 45% of SMEs are currently in litigation, with around 53% sued annually. 

These percentages are important, as they demonstrate how prevalent legal risks are in the business world. As an entrepreneur – especially an HBCU entrepreneur, where access to resources may be limited – it’s your job to understand the reality of litigation and to protect your business appropriately.

Attaining the Right Insurance

The best way to do this is by attaining the right insurance. In 2025, general liability insurance by Next Insurance has become a great option for those seeking a more tailored solution. 

No matter what your business is, you have the chance to protect yourself from injury claims, property damage, medical payments, and, of course, legal fees and defence costs, giving you the support needed to see everything through. 

As mentioned previously, the majority of African-American-owned businesses only have a third of the capital of white business owners. That’s an estimated $1.6 trillion gap in aggregate revenue between black-owned and non-black-owned businesses across the US economy. 

With this in mind, it’s even more crucial to secure affordable, comprehensive coverage, giving you the peace of mind that your business is protected without breaking the bank. 

Understanding Industry Risks

It’s also important to understand the specific risks of your industry. 

Nearly a third of businesses produced by HBCUs operate in the health care and social assistance sector, so if this relates to your business, you’re going to have to look into the details of either field and ensure you have the appropriate coverage tailored to those particular risks.

In healthcare, for instance, that could be coverage like medical malpractice liability, or health data privacy and cybersecurity. In the social assistance sector, it could be coverage for things like professional liability or EPLI. If you know what to look out for, you’ll be far better placed to choose the right tailored insurance plan and get your company covered.

Conclusion: Navigating Liability

The main thing you have to know about liability is that, in most cases, it’s unavoidable. While you can plan ahead and put yourself in the best position to avoid any lawsuits, mistakes can always happen, and unforeseen circumstances can always arise. 

90% of all US companies are not incompetent, of course. And yet they still go through a lawsuit at some stage in their lifespan. It’s your job to recognise the reality you’re working in – that lawsuits, claims, and legal disputes are an unfortunate but often unavoidable part of doing business. 

Once you have done that, you can make sure you have the proper contracts in place, you stay compliant with regulations, implement strong risk management practices and, most importantly, invest in comprehensive insurance that can protect you in a variety of scenarios.