Inflated medical costs, increased legal liabilities and data risks top the list of concerns of the American business owner this year, according to a new survey from Travelers. The insurer’s annual Business Risk Index asked more than 1,100 decision-makers with businesses large and small to rate the forces they thought posed the biggest threats to their business.
A whopping 67% labeled medical cost inflation as among the leading risks for their businesses, while 58% also cited legal liability issues under the errors and omissions heading. Another 53% identified data risks, such as hacking and viruses, as threatening their businesses, while 52% said understanding and complying with increasingly complex laws and regulations was worrisome.
Other ranking concerns included extreme weather events, which are perceived as happening more frequently.
Not surprisingly, noted Travelers’ Executive Vice President of Business Insurance Bill Cunningham, the risks respondents identified as most threatening were also the risks they felt their businesses were least equipped to deal with.
“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,” Cunningham said. “Many respondents believe their businesses are least prepared to handle these risks.”
Indeed, just 55% of respondents said their business had a business continuity plan in place in case of an extreme weather event.
Even more concerning is the fact that only 24% of respondents said their company was preparing for and responding to the risks identified in the survey. And while small businesses pointed to risk management as a priority, many have not made significant strides.
Fortunately, insurance solutions are widely available and present opportunities for producers within a bevvy of policies: cyber liability, business interruption, professional liability and employee benefits.
“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,” Cunningham said.