According to the 2015 Business Risk Survey, business leaders are most concerned about potential risks associated with healthcare costs and cybersecurity threats to their organizations.
The survey also found that even though business leaders perceive that they are taking the adequate measures to protect their organizations, in reality they’re falling short of doing what’s necessary to mitigate the risk associated with these potential threats.
“In the modern-day business environment where everything is interconnected, the potential threats facing a business are immense,” said Ken Ewell, President and COO of The Graham Company. “This complexity of risks has caused many business leaders to become overwhelmed and unknowingly expose their businesses to risks that threaten their bottom line.”
When asked to consider the single biggest risk facing organizations, business leaders’ opinions varied, but cyber security had the highest proportion with 21% of respondents naming it as the number one risk they were most concerned about. Tied for the second greatest risk was professional liability (i.e., employee errors and omissions) and legal liability issues (16%), followed by healthcare costs (14%).
According to The Graham Company’s survey, 64% of respondents felt that their organization was either very well prepared or fairly well prepared to address the risks associated with healthcare costs, and 83% of respondents felt the same way about employee safety in the workplace. However, only slightly more than half of respondents regularly consulted with an insurance or risk management expert to review plans for mitigating risk.
“A one-size-fits-all approach to insurance and risk management isn’t adequate in today’s constantly evolving business environment,” continued Ewell. “Business leaders need to shift their risk management approach from passive and general, to proactive and specialized in order to protect their companies.”
Additional Survey Highlights:
Small Business Healthcare Costs - 60% of decision-makers at small businesses (between 50 and 499 employees) felt that the Affordable Car Act (ACA) has had a negative impact on their organization. Reasons for these feelings include:
• Higher healthcare costs
• Reduction in the quality of healthcare benefits offered because of trying to manage costs due to ACA
• ACA requiring excessive internal resources
• Lower employee morale
• Changes in hiring
• Making it more difficult to recruit and retain well-qualified employees
Big Business, Big Risk - 55% of respondents felt that their organization faces higher risks today compared to a few years ago. Despite 76% of large businesses (those with 5,000 or more employees) saying they’re prepared for reputational risk or liability faced by directors and executives of their organization, only 49% of them have Directors and Officers Liability Insurance.
Professional and Legal Liability – Nearly 70% of all respondents expressed concern over employee errors and mistakes causing damage to their business operations, yet only 56% of respondents have Professional Liability insurance to deal with these kinds of issues. Furthermore, more than half of the respondents demonstrated concern over legal liability and potential lawsuits. While 78% of respondents said they are prepared to deal with these legal matters, they aren’t taking the necessary precautions to mitigate the risk of these potential threats.
Cyber Threat Fears – Survey results show that companies’ fears regarding cyber threats are significant, with nearly half of respondents expressing that they felt there was a significant level or risk regarding the following:
• A hacking incident leading to theft of customer information
• Inability to use the organization’s network
• Theft of employees’ private information
• Theft of intellectual property
• Inability to access the organization’s website