Risks That Worry Business Owners the Most

Worried businessman working at desk

Is the world becoming more or less risky for businesses from year to year? Which risks concern business owners the most? To answer those questions, Travelers Insurance conducted a Business Risk Index Survey in 2017. The company hired a research firm that surveyed 1,203 businesses in various industries. The respondents included 474 owners or managers of small companies (businesses with less than 50 employees). Travelers has conducted an annual risk survey every year since 2014.

How Businesses Feel About the Future

According to the survey, fewer businesses feel that risks are increasing. In 2014, 48 percent of businesses thought their business was becoming riskier. In 2017, the percentage was 37 percent. As the following table demonstrates, businesses have become more optimistic about their future as the economy has improved.


More Risky

No Change

Less Risky

2014 48 percent 38 percent 14 percent
2015 44 percent 43 percent 12 percent
2016 41 percent 44 percent 15 percent
2017 37 percent 45 percent 18 percent

This table summarizes the responses from small businesses.


More Risky

No Change

Less Risky

2014 40 percent 47 percent 13 percent
2015 36 percent 54 percent 10 percent
2016 36 percent 52 percent 12 percent
2017 33 percent 56 percent 11 percent

Risks That Worry Business Owners the Most

Travelers wanted to know what types of risks worried business people the most. To that end, it presented survey participants with a list of risks and asked them to rate each one. Participants were asked to indicate whether they worried "a great deal" or "worried some" that the risk would affect their business.

The risks included in the survey appear in the table below. They are listed in descending order of importance, meaning the issues that generated the most concern appear at the top. The first two columns of percentages are for 2017. The annual percentages (last four columns) include respondents who indicated they "worried a great deal" or "worried some" about the various risks. Travelers notes that the top five risks have remained virtually unchanged from year to year.


Worried a Great Deal

Worried Some





Medical Cost Inflation 27 percent 33 percent 61 percent 59 percent 60 percent 67 percent
Cyber, Technology & Data Breaches 25 percent 31 percent 56 percent 54 percent 58 percent 53 percent
Employee Benefits Cost 23 percent 32 percent 55 percent 56 percent 56 percent 52 percent
Legal Liability 16 percent 35 percent 51 percent 51 percent 56 percent 58 percent
Attracting & Retaining Workers 15 percent 35 percent 51 percent 50 percent 53 percent 50 percent
Complying With U.S. Laws & Regs 17 percent 30 percent 47 percent 45 percent 51 percent 52 percent
Broad Economic Uncertainty 13 percent 33 percent 46 percent 48 percent 51 percent 57 percent
Financial Issues 13 percent 32 percent 44 percent 43 percent 49 percent 47 percent
Employee Safety 10 percent 28 percent 37 percent 36 percent 43 percent 39 percent

In all of Travelers' surveys, business managers have cited medical cost inflation as their top concern. Rising medical costs can lead to higher workers compensation premiums. They can also boost the cost of employee benefits, which is number three on the list.

There were 159,700 cyber attacks against businesses in 2017. Many attacks aren't reported, so the actual number may exceed 350,000. Given these statistics, it isn't surprising that data breaches and other cyber events made the "top five" list. Two other key risks for business managers are legal liability (which can result in lawsuits) and employee retention.

Trends Create Opportunities and Risks

The survey included a section on emerging trends. Travelers wanted to know whether business people viewed trends, such as the growth of social media, as an opportunity or a risk. Thus, it asked survey participants to indicate which trends represented their greatest opportunities and which ones created the greatest risks for their business over the next five years. Here are the results:


Greatest Opportunity

Greatest Risk

E-Business 30 percent 17 percent
Increased Connectivity 28 percent 14 percent
Social Media 24 percent 18 percent
Increased Automation 21 percent 19 percent
Empowered Consumers 20 percent 18 percent
Globalization 17 percent 17 percent
Changing Workforce 17 percent 38 percent
Urbanization 16 percent 10 percent
Sharing Economy 12 percent 11 percent
Energy Dynamics 12 percent 17 percent
Driverless Cars 7 percent 10 percent
Climate & Weather Volatility 5 percent 13 percent
None of These 10 percent 13 percent

Of the emerging risks listed above, the changing workforce was cited by 38 percent of respondents as the biggest risk. Older, experienced workers are retiring and are being replaced by millennials. Some businesses are having difficulty finding workers with the right set of skills.

The survey indicates that some trends may benefit smaller businesses more than large ones (and vice versa). For instance, small and mid-sized businesses cited e-business (conducting business via digital platforms), increased connectivity, and the use of social media as their biggest opportunities. Large businesses cited automation as their biggest opportunity. Big companies also saw value in e-business and increased connectivity.

According to Travelers, survey respondents were split on the issue of globalization. Seventeen percent  viewed globalization as a threat while the same percentage considered it an opportunity.

Delving Into the Details

As noted previously, the Travelers' survey asked participants what risks worried them the most. It then delved into the details of each risk category.

Cyber Risks

Travelers' survey included a list of cyber risks. Participants were asked whether they worried "some" or "a great deal" about each item on the list. The results indicated that the two most worrisome risks for business people were security breaches and malfunctioning computer systems. Other top concerns were unauthorized access to financial records, theft of customer records, and unsafe computing practices by employees. In 2016, 31 percent of survey respondents worried about ransomware attacks. In 2017, the number had grown to 39 percent.

Worker Safety

Travelers' survey showed that many business managers worry about risks associated with worker safety. Such risks include workplace injuries (in general), repetitive injuries (specifically), the cost of wellness programs, the general health of the workforce, and distracted driving. These issues were of greater concern to large and mid-sized businesses than small ones.

Legal Liability

With regard to legal liability, employers were especially concerned about employees' on-the-job use of personal vehicles and personal mobile devices. Accidents involving personal autos used for business can result in claims against the employer. Mobile devices can create liability for employers under the Fair Labor Standards Act. The law may apply if non-exempt employees use their devices for work while they are off the clock.

Weather Risks

Severe weather events can damage property, endanger workers, and disrupt supply chains. However, the most worrisome weather-related risk for survey respondents was business interruptions. Small businesses were more concerned about this risk than mid-sized or large companies.