Medical cost inflation, legal liability and technology risks among
biggest challenges for businesses
HARTFORD, Conn.--(BUSINESS WIRE)--
American businesses large and small say medical cost inflation, legal
liabilities and technology risks are among their top concerns, according
to the baseline findings of a new annual Business Risk Index from
Travelers (NYSE: TRV).
The survey polled more than 1,100 business decision makers to better
understand what they believe poses the biggest threat to their business.
Many leaders said the risks they identified as their biggest concerns
are also the issues 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, Executive Vice President of Business Insurance at
Travelers. “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.”
Amidst a rapidly changing healthcare landscape and recent, highly
publicized cyber breaches, the top risks identified by those polled
included:
-
67 percent thought medical cost inflation was a leading risk for their
business;
-
58 percent cited legal liability issues, such as omissions and errors;
-
53 percent were concerned about technology issues including data
risks, such as hacking and viruses; and
-
52 percent 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 percent of respondents believe the world is
growing riskier, only about one in four (24 percent) business decision
makers say that preventing, preparing for and responding to risk is a
strategic priority. Of this group, 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
When asked how much they worry about certain risks affecting their
business, medical cost inflation was the leading risk. While many
business decision makers are concerned with this issue, and 60 percent
of respondents identified this risk as increasing, it is the risk that
executives believe their business is least prepared to manage.
Technology
Computer, technology and data-related risks, particularly computer
viruses and hacking, are of major concern to business decision makers.
In fact, 59 percent of respondents worry about their systems being
infected with a virus and being susceptible to a security breach.
Additionally, 44 percent worry about losing control of customer records
and 50 percent are worried about the company computers becoming damaged
or going down.
Legal Liability
Legal liability-related risks are another significant source of concern
for business decision makers. These risks include professional mistakes,
which worry 44 percent of respondents; driving accidents, which are a
concern for 33 percent of those surveyed; and lawsuits brought on by
employees, which concerns 35 percent of business decision makers.
Small Businesses at Risk
Small business decision makers do not appear as worried as their
counterparts from mid- to large-sized companies about the issues
identified as the top risks in the Travelers Business Risk Index. While
they have indicated less concern, a damaging event could have an even
greater long-term impact on a small business, which generally has less
access to capital. The Business Risk Index identifies that only about
half (55 percent) of small business owners rely on risk management
guidance from their insurance carrier.
Additional Concerns
American business executives worry about numerous other risks. Sixty
percent of respondents believe that extreme weather events are happening
more frequently, and 37 percent believe the increase in severe weather
frequency and severity poses an increased risk of damage to their
business (e.g., damage to property, equipment, facilities or vehicles).
About half (55 percent) of those surveyed have a business continuity
plan in place, and only 30 percent of small business decision makers
reported having a business continuity plan. Access to capital and
financial issues worry 47 percent and, at 42 percent, risk to corporate
reputation is also a mid-level concern. Concerns about employee safety
and global economic risk were cited by 39 and 40 percent of American
business executives, respectively.
For full results, including industry-specific information, please visit www.Travelers.com/BusinessRiskIndex.
About the Survey
Hart
Research conducted a national online survey of 1,166 business
decision makers from Feb. 10, 2014 to Feb. 27, 2014. Small businesses
are defined as those having 2 - 49 employees, mid-sized businesses as
having 50-999 employees and large businesses as having 1,000+ employees.
The survey was commissioned by Travelers and has a statistical margin of
error of +/- 2.9 percentage points.
About Travelers
The Travelers Companies, Inc. (NYSE: TRV)
is a leading provider of property casualty insurance for auto,
home
and business.
A component of the Dow Jones Industrial Average, Travelers has
approximately 30,000 employees and generated revenues of approximately
$26 billion in 2013. For more information, visit www.travelers.com.
The Travelers Companies, Inc.
Daryl Richard, 860-954-0844
dricha10@travelers.com
or
Matt
Bordonaro, 860-277-7014
mbordona@travelers.com
Source: The Travelers Companies, Inc.