The Reality Gap
Today, Allianz have published their annual index of business risks for companies in the UK and it lists the most important as follows:
- Cyber
- Legislation changes
- Business interruption
- Loss of reputation or brand value
- Market developments
- New technologies
- Natural catastrophes
- Political risks
- Fire and explosion
- Macroeconomic
Now these may or may not be high on the list of the average small business owner but the interesting thing is the gap between what this survey says and what insurances small businesses are seeking to provide protection against risk. I see most businesses protecting themselves against traditional property and liability exposures (7 & 9 above) but fewer taking a serious look at their cyber exposure which permeates almost all of the above categories.
I think this is largely due to the still intangible nature of the risks. Its easy to comprehend theft of computer equipment valued at £10,000 but how might I value damage to my reputation? "Oh lets move on and concentrate on maintaining our good name!" However, unforeseen events happen which can hurt and this is exactly where insurance steps in, not only in the form of financial assistance, but with expert assistance to manage and mitigate difficult circumstances.
Its time to manage the reality gap and think wider about business risks to make sure that the unforeseen does not catch you unawares.
Let me know if you want to have a chat about your insurance arrangements.