Small Business Owners by the Numbers: The Coverage Gap

The U.S. has 36,207,130 small businesses, and 82.3 percent of them have no paid employees. About 9.8 million people worked as unincorporated self-employed in 2025. When you work for yourself, there is no employer life insurance plan to fall back on.

We pulled the latest official figures from the SBA Office of Advocacy and the U.S. Bureau of Labor Statistics (BLS) to show who small business owners are, how long their businesses last, and how thin workplace life insurance is at small employers. Every number below is reported as the agency published it, unless we note that we computed a share.

Key findings

1. 36.2 million small businesses. The SBA Office of Advocacy counts 36,207,130 small businesses, 99.9% of all U.S. firms, in its February 2026 FAQ (Census data for 2022).
2. Most have no paid employees. 29,811,495 small businesses, or 82.3%, had no paid employees in 2022. And 86.7% of nonemployer firms were sole proprietorships.
3. 9.8 million self-employed. An average of 9,836,000 people were unincorporated self-employed in 2025, about 6.0% of all employed people. We added BLS's agriculture and nonagricultural counts from the Current Population Survey annual averages and computed the share (see Methodology).
4. A workplace coverage gap by size. In March 2026, 40% of private-industry workers at establishments with 1 to 49 workers had access to employer life insurance, compared with 86% at establishments with 500 or more workers (BLS).
5. About half of new employer establishments don't reach year five. From 1994 to 2022, an average of 49.2% of new employer establishments survived five years, according to the Advocacy FAQ, which uses BLS Business Employment Dynamics data.

How many small businesses are there?

36,207,130, based on the most recent Census counts for 2022. The SBA Office of Advocacy defines a small business for research purposes as an independent business with fewer than 500 employees.

Table 1. U.S. small businesses at a glance

Source: SBA Office of Advocacy, Frequently Asked Questions About Small Business, February 2026.

The report also shows how owners organize. Among small employer firms in 2022, 55.0% were S corporations, 12.3% were sole proprietorships, 12.1% were partnerships, and 13.9% were C corporations or other forms. The legal form matters for life insurance taxes, which we cover in our guide to whether life insurance is tax deductible for business owners.

How many Americans are self-employed?

About 9.8 million, counting only people whose businesses are not incorporated. BLS annual averages for 2025 show 680,000 unincorporated self-employed workers in agriculture and 9,156,000 in other industries.

Men made up 5,336,000 of the nonagricultural group and women 3,819,000. For the most recent month, the August 2026 Employment Situation reported 8,778,000 unincorporated self-employed in nonagricultural industries, seasonally adjusted.

Table 2. Unincorporated self-employed workers by industry, 2025 annual average

Source: BLS CPS annual averages, Table 16. The table shows the eight industries with the most unincorporated self-employed workers, plus the total. Shares computed by dividing column 2 by column 3.

Two smaller industries stood out when we computed the same shares. In real estate and rental and leasing, 491,000 of 3,190,000 workers, or 15.4%, were unincorporated self-employed. In arts, entertainment, and recreation, the figure was 503,000 of 3,468,000, or 14.5%.

How common is life insurance at small employers?

Much less common than at large ones. The BLS Employee Benefits Survey found that 59% of all private-industry workers had access to employer life insurance in March 2026. At establishments with 1 to 49 workers, the figure was 40%.

Table 3. Access to employer life insurance by establishment size, private industry, March 2026

Source: BLS, National Compensation Survey, Employee Benefits in the United States, March 2026, Table 5. BLS calculates the take-up rate from unrounded access and participation figures.

Two more rows from the same table add context. Access was 74% for full-time private-industry workers and 14% for part-time workers. When workers had access, nearly all of them used it; take-up was 98% across private industry.

Owners fall outside these numbers entirely. The BLS technical note says private industry in this survey excludes "the self-employed, workers who set their own pay (e.g., proprietors, owners, major stockholders, and partners in unincorporated firms)." In other words, the survey measures what employers offer their workers; it doesn't count owners' own coverage at all.

How long do small businesses last?

On average, about half of new employer establishments were still open after five years. The Advocacy FAQ reports these average survival rates for 1994 to 2022:

• 2 years: 67.7%
• 5 years: 49.2%
• 10 years: 33.9%
• 15 years: 25.5%

It also notes that 69.5% of establishments that reach five years go on to reach ten. In 2023, 1.3 million establishments opened for the first time and about 1.2 million closed permanently.

Methodology

We used three official sources and did not adjust any figure the agencies reported.

• Business counts and survival: SBA Office of Advocacy, Frequently Asked Questions About Small Business, February 2026. Advocacy states its business counts come from the Census Bureau's 2022 Statistics of U.S. Businesses and 2022 Nonemployer Statistics. Survival rates come from BLS Business Employment Dynamics as reported by Advocacy.
• Self-employment: BLS Current Population Survey, 2025 annual averages, Tables 12 and 16, plus the August 2026 Employment Situation, Table A-8. BLS notes the 2025 annual figures are 11-month averages that exclude October, because October 2025 data were not collected during the federal government shutdown. BLS also counts people with incorporated businesses as wage and salary workers, so these figures cover unincorporated self-employed workers only.
• Life insurance access: BLS National Compensation Survey, Employee Benefits in the United States, March 2026, Table 5, private industry. "Access" means the employer offers the plan. "Take-up rate" is the share of workers with access who participate.

Computed figures. The 9.8 million total adds BLS's agriculture (680,000) and nonagricultural (9,156,000) counts. The 6.0% share divides that total by 163,493,000 total employed in 2025. Industry shares in Table 2 and in the real estate and arts comparison divide each industry's unincorporated self-employed count by its total employment. We rounded to one decimal place.

Limits. The Advocacy counts and the BLS counts measure different things. Advocacy counts businesses, while the CPS counts people and their main job. One person can own more than one business, and a nonemployer firm can be a side business rather than the owner's main job.

What this means for life insurance

If you work for yourself, any life insurance you have is coverage you bought on your own. Even if your household has a group plan through a spouse's job, that coverage usually depends on the job staying in place.

A few practical takeaways:

1. Size coverage to your own income. A multiple of salary is harder to apply when income swings. Our guide to how much life insurance you need walks through other methods.
2. Plan for the business, too. If partners, employees, or a lender depend on you, look at key person life insurance and the SBA loan life insurance requirement.
3. Revisit it as the business grows. A new hire, loan, or partner can change what coverage you need.

For a full overview, see our guide to life insurance for self-employed people, or browse the self-employed life insurance hub.

How to cite this data

Suggested citation: Your Insurance Consultants, "Small Business Owners by the Numbers: The Coverage Gap," updated September 30, 2026, using data from the SBA Office of Advocacy and the U.S. Bureau of Labor Statistics.