Survey finds risk management is low priority among small business owners

Risk management ranks relatively low among the priorities facing small business owners, and nearly half of small businesses are operating without a business continuity plan, according to a survey.

The study was conducted by Travelers at the U.S. Chamber of Commerce's recent America's Small Business Summit 2010 in Washington, D.C.

"Small business ownership, while potentially very rewarding, also carries with it great risks," said Marc Schmittlein, president and CEO of Travelers Select Accounts. "Owners largely focus their efforts on growing their business and, too often, they overlook risks that could stunt that growth and/or even shut their doors for business permanently. The most successful owners are those that balance their pursuit of growth with a prudent approach to risk management."

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Moreover, 44 percent of small businesses are operating without a business continuity plan. Only 36 percent of respondents said they had spoken with an insurance agent about developing one despite data from the American Red Cross that as many as 40 percent of small businesses do not reopen after a disaster.

The survey found that 41 percent of business owners considered themselves extremely confident that their firms are protected against insurable risks that can result in significant financial losses or even cause them to go out of business altogether. However, researchers said this confidence comes despite the fact that 39 percent of business owners are unable to make the time necessary to effectively identify and manage operational risks.

Read more at the WorkersComp Forum homepage.

August 5, 2010

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