In Women Are Not Small Men, her groundbreaking book on women’s health, cardiologist Nieca Goldberg promoted the concept that women require a different health care approach than that used for men. Because the basic physiology of women is so different from that of men, Goldberg said, effective health care strategies for women need to be crafted from scratch with their needs in mind, rather than being adapted from research performed on men.

Likewise, small businesses are not merely smaller versions of Fortune 500 companies. They are truly a different species. Meeting their employee benefit needs requires products geared to those unique needs, rather than just scaled-down versions of big-business benefit plans.

Companies with fewer than 500 employees comprise a vast, under-penetrated market that is a prime opportunity for new disability benefit sales. And for many of these companies, traditional disability plans are a very good fit.

However, many small businesses want and need a disability plan, but have unique conditions that require a special effort to put coverage within their reach.

Disability income protection is every bit as important and appropriate on the shop floors of America’s small businesses as it is in the executive suites of the Fortune 500. Employers and employees alike are becoming increasingly aware of that need.

Consider these facts:

According to a 2002 study by the American Council of Life Insurers, one in three workers between the ages of 35 and 65 will suffer a serious disability.

A 2005 Harvard University study indicates that nearly half of all bankruptcies are due to disabling medical conditions.

Disability is 16 times more likely than death to cause a foreclosure, according to information from the Disability Insurance Marketing Center, U.S. Government Housing and Home Finance Agency, and Health Insurance Matters.

This untapped market is so large, and recognition of the importance of disability protection is growing so fast, that it is generating an explosion of innovation and creativity in the disability insurance field. This is leading to an array of new products that offer far more features and flexibility than do traditional policies.

One of the most potent factors driving this process is a need to make disability more affordable to small businesses. The percentage of hourly positions is higher in the 500-lives-and-under segment, so rates need to be brought to a different level to put them within reach of these employers and their workers.

At the same time, a lot of these businesses do not employ full-time HR professionals, so they require very user-friendly support mechanisms that don’t create time-consuming administrative burdens.

Finally, and most importantly, small businesses usually have tighter benefits budgets. “Buy only what you need” is a small-business mantra that demands flexibility on the part of the insurer.

New products are needed, but it’s not about flash and dash and new for the sake of new. It’s about building something from scratch and using your customers’ needs — not your existing template — as a starting point.

Successful and innovative small business disability products have been designed exactly that way. Research into customers’ situations and needs ideally should serve as both a blueprint and a foundation for construction of the product.

One solution is to craft new definitions of disability as the basis for products that enhance affordability and access by focusing on serious, life-changing disabling events. An example is a definition that uses impairment ratings based on widely accepted guidelines, such as those published by the American Medical Association. That concept is so innovative it has been granted patent-pending status.

Another answer is to combine features of different types of coverages into a single product requiring only one enrollment and payroll deduction. An example is a product based on a short-term disability platform that extends to a long-term benefit lasting from a full year up to age 65, if specific conditions such as cancer, diabetes or multiple sclerosis are diagnosed. Thus, popular elements of short-term and long-term disability and critical illness policies are combined into one product.

Serving the small business market also requires the ability and the willingness to craft unique packages to satisfy customers whose needs and objectives may be more dependent on local conditions within their industry than national macro-economic factors.

The small business benefits customer can’t afford to pay for bells and whistles that don’t provide value. So, in some cases, insurers are working with brokers to create benchmarking studies within industries or metropolitan areas and then craft benefit packages that allow their clients to easily and affordably achieve parity with their competition.

Product flexibility, therefore, is key. Small business customers want flexibility in determining a definition of disability, in participation requirements, and in the ability to “class-out” benefit packages by employee category. They thereby pay only for the benefits they want, and not for “extras” that don’t provide the return on investment they need.

In sum, this market-driven innovation explosion has taken many forms. New products have emerged, as well as new approaches to sharing costs between employers and employees. These innovations have played a critical role in transforming disability income protection from an executive suite perk to a mainstream employee benefit for the masses.

Of course, we can expect the future to bring new challenges: greater cost pressures, new customer demands, bigger underwriting challenges. The pressure to innovate isn’t going to go away any time soon. But those who are up to the challenge have a huge new market to win.