American businesses large and small say medical cost inflation, legal liabilities and technology risks are among their top concerns, according to the new annual Business Risk Index from insurance provider Travelers.
A recent survey polled more than 1,100 business decision-makers to better understand what they believe pose the biggest threats 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,” says 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 health-care landscape and recent, highly publicized cyber breaches, 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
• 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 one in four (24%) 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% of respondents identified this risk as increasing, it is the risk that executives believe their business is least prepared to manage.