Tradesman Saver, a leading insurance provider for small businesses and tradespeople, has highlighted the top five risks that UK businesses are expected to face in 2023. Based on insights from risk management experts across 94 countries and territories, these risks have been identified as the most pressing concerns for businesses in the coming year.
As the UK continues to navigate major changes in the economy following the pandemic, and with the increasing prevalence of technologies such as artificial intelligence, businesses will need to adapt their strategies to ensure success in the face of these challenges.
- Cyber incidents: Cyber incidents, including IT outages, ransomware attacks, and data breaches, continue to be the top risk for UK businesses. Ongoing conflict in Ukraine and wider geopolitical tensions are increasing the likelihood of large-scale cyber-attacks. Data breaches are particularly concerning for companies due to the potential for significant notification costs, fines, penalties, and reputational damage. Small businesses are particularly vulnerable to cyber incidents, as they often have weaker security controls and fewer resources to deal with the aftermath of an attack.
- Business interruption: Business interruption, including supply chain disruption, is another significant risk for UK companies. Despite efforts to diversify business models and supply chains post-pandemic, disruptions persist. The recent turmoil in Ukraine and ongoing global supply chain issues, such as semiconductor shortages, are causing further strain on businesses.
- Macro-economic developments: Macro-economic developments, including inflation, deflation, and monetary policies, have emerged as a new risk in 2023. The simultaneous crises in the US, China, and Europe, along with the Russian invasion of Ukraine, have led to increasing energy prices and inflation. The UK is currently in a recession, with the economy expected to contract by 0.7% in 2023. However, some experts predict a return to growth during the second half of the year as inflation and energy prices begin to stabilise.
- Energy crisis: The energy crisis is another new risk for 2023 that has impacted businesses. Energy prices have risen due to post-pandemic economic recovery, supply chain disruptions, and delayed maintenance work. The crisis intensified with the invasion of Ukraine by Russia, the world’s largest exporter of fossil fuels. Although the UK relies on Russia for less than 4% of its total gas supply, it remains susceptible to fluctuating international gas prices.
- Shortage of skilled workforce: The shortage of a skilled workforce, a consequence of the Covid-19 pandemic and rising wage inflation, persists as a risk for UK businesses. Many countries, including the UK, face a reduced workforce and high demand for labour. The situation is exacerbated by post-Brexit immigration rules. The construction industry is among the hardest hit, with 75% of contractors experiencing recruitment issues.
In order to protect against these risks, Tradesman Saver offers tailored insurance solutions, including public liability insurance, to help businesses safeguard against potential losses. To learn more about how Tradesman Saver can support your business, visit their website at https://www.tradesmansaver.co.uk/public-liability-insurance/ or contact their helpline for more information.
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