American businesses of various sizes identified medical cost inflation, legal liabilities and technology risks among their top concerns, according to Travelers’ newly released annual Business Risk Index.
Travelers polled more than 1,100 business decision-makers to learn what they believe pose the biggest threats to their business–and, perhaps not surprisingly, many of those polled said the risks they identified as their biggest concerns are also the ones their business is least prepared to address.
“While the new Business Risk Index revealed some typical risks for businesses, it also uncovered some uncertainties that are indicative of the times, including medical cost inflation and technology risks,” said Bill Cunningham, Travelers’ executive vice president of business insurance. “Many respondents believe their businesses are least prepared to handle these risks. The good news is that many of these risks can be mitigated and there are resources available to help businesses of any size stay protected.”
The top risks identified by those polled included:
- 67% thought medical cost inflation was a leading risk for their business;
- 58% cited legal liability issues, such as omissions and errors;
- 53% were concerned about technology issues including data risks, such as hacking and viruses; and
- 52% reported concerns with understanding and complying with U.S. government laws and regulations that may affect their business or industry.
Despite the fact that 48%of respondents believe the world is growing riskier, only about 24% of business decision-makers say that preventing, preparing for and responding to risk is a strategic priority at their company. Of this segment, small businesses were least likely to name risk management as a strategic priority or an important management activity compared to large and medium-sized companies.
Medical cost inflation was the leading risk cited by respondents; 60% of them identified this risk as increasing. Again, however, they said it’s the risk they believe their business is least prepared to manage.
Computer, technology and data-related risks, particularly computer viruses and hacking, are also of major concern to business decision-makers. In fact, 59% of respondents said they worry about their systems being infected with a virus and being susceptible to a security breach; 44% worry about losing control of customer record; and 50% are worried about their company computers becoming damaged or incapacitated.
Legal liability-related risks are another significant source of concern for businesses. These include professional mistakes, which worry 44% of respondents; driving accidents, which are a concern for 33% of those surveyed; and lawsuits brought on by employees, a concern for 35% of business decision-makers.
Small business decision-makers were not as worried as their counterparts at mid- to large-sized companies about the issues identified as the top risks in Travelers’ index–which is ironic, since a damaging event could have an even more devastating long-term impact on a small business, which typically have less access to capital. The Index states that just over half (55%) of small business owners rely on risk management guidance from their insurance carrier.