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.