Lack of emphasis on risk management could have long-term implications
HARTFORD, Conn., Jun 08, 2010 (BUSINESS WIRE) --Risk management ranks relatively low among the many priorities facing small business owners, is the finding of a new survey conducted by Travelers.
The survey, conducted at America's Small Business Summit 2010, held May 17-19, 2010 in Washington, D.C., also found that nearly half of small businesses are operating without a Business Continuity Plan. Travelers is a corporate sponsor of the Summit, hosted by the U.S. Chamber of Commerce.
"Small business ownership, while potentially very rewarding, also carries with it great risks," said Marc Schmittlein, President and Chief Executive Officer, Travelers Select Accounts. "Owners largely focus their efforts on growing their business and, too often, they overlook risks that could stunt that growth and/or even shut their doors for business permanently. The most successful owners are those that balance their pursuit of growth with a prudent approach to risk management."
According to the survey, ranked in order from highest to lowest, business owners' most pressing priorities are:
1. Marketing and sales
2. Managing cash flow
3. Attracting financing
4. Attracting and retaining employees
5. Identifying and managing insurable risks
6. Compliance with federal and state regulations
7. Protecting against litigation and lawsuits
In addition to the relatively low priority placed on risk management, 44 percent of small businesses are operating without a Business Continuity Plan and only 36 percent have ever spoken with an insurance agent about developing one, despite data from the American Red Cross that indicates that as many as 40 percent of small businesses do not reopen after a disaster.
The survey found that business owners are confident that their businesses are protected against insurable risks that can result in significant financial losses or even cause them to go out of business altogether. In fact, only six percent of business owners are not at all confident that their business is adequately protected; 53 percent are somewhat confident and 41 percent consider themselves extremely confident. This confidence comes despite the fact that 39 percent of business owners are unable to make the time necessary to effectively identify and manage operational risks, given competing priorities.
Schmittlein continued: "While confidence is key to a small business owner's success, so much of what can derail a business is outside of the business owner's control. There is no reason for a business owner to bear risks that can be avoided. Developing a Business Continuity Plan is a critical success factor for business owners with a long-term view."
As one of the largest providers of small business insurance, Travelers has the background and experience necessary to offer small business owners superior products and services. By working with independent insurance agents that represent Travelers, small business owners have access to insurance coverages and risk mitigating services designed to protect against the unique risks and exposures they face, giving them the time to tend to their business and know that it is protected.
Full results of the small business owner survey are available online - Risk Management on Main Street. For more information on developing a Business Continuity Plan, visit Travelers Risk Control Services industry-leading website http://www.travelers.com/business/iwcm/RiskControl/home/index.aspx or speak to an independent insurance agent.
The Travelers Companies, Inc. (NYSE: TRV) is a leading property casualty insurer selling primarily through independent agents and brokers. The company's diverse business lines offer its global customers a wide range of coverage in the auto, home and business settings. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and generated revenues of approximately $25 billion in 2009. For more information, visit http://www.travelers.com/.
SOURCE: The Travelers Companies, Inc.
The Travelers Companies, Inc.
Jeffrey Weir, 860-277-8692