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By Agency Forward Editorial Team

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Businesses need sound risk management strategies to confront variety of threats

March 24, 2025

Business owners are facing a wide variety of large-scale risks in today’s marketplace, such as economic uncertainty, cyber attacks, extreme weather events, and worker shortages. While these broad threats can impact anyone, businesses need to approach these risks in ways that are unique to their operations in order to effectively mitigate them.

A recent Nationwide survey sheds insight on what owners of small and mid-sized businesses are concerned about and their level of preparation for those risks.

Small businesses are worried about:

  • Economic downturns (54%)
  • Supply chain disruptions (39%)
  • Cash flow disruptions (37%)
  • Attracting and retaining skilled workers (33%)
  • Cybersecurity (28%)

Meanwhile, middle market owners are concerned about:

  • Economic downturns (43%)
  • Supply chain disruptions (42%)
  • Cybersecurity (42%)
  • Regulatory changes (42%)

The threat of these and other risks are top of mind for many businesses and they are allocating funds to address them – 83% of middle market businesses and 71% of small businesses have a dedicated budget for safety.

Fully prepared statistic.

However, many organizations feel some unease about their level of preparation: 50% of mid-market businesses and 30% of small business owners don’t feel like their actions are fully effective at mitigating risks and protecting their workers.

Looking into this a little deeper we see:

  • Half of mid-market businesses and 53% of small businesses do not have vehicle safety programs
  • Nearly 60% of mid-market businesses and about 70% of small businesses have not designed safe access points or restricted entry to hazardous areas
  • About 1 in 5 mid-market businesses and one-third of small businesses don’t have a business continuity plan
  • About 20% of mid-market owners and 25% of small businesses feel unprepared to respond to new regulations

Middle Market business owners cited some of the challenges with implementing risk management solutions, which include:

  • Cost of safety measures (38%)
  • Maintenance of safety equipment (31%)
  • Resources required for conducting regular safety assessments (30%)

Looming threats

National statistics show increasing costs and billions of dollars in losses support why business owners are so concerned about disruptions, downturns and shortages:

  • Extreme weather – Severe thunderstorms, tropical weather, wildfires and drought can cause significant disruption in business operations. Even if property isn’t directly damaged, weather can still impact a business through events such as mandatory evacuation orders, destroyed roads or other transportation infrastructure, and disrupted supply chains.

In 2024, there were 27 major weather disasters1 and the United States experienced the highest amount of economic loss due to natural disasters since 2017. Those extreme weather events contributed to an 85% year-over-year increase in economic losses last year, totaling $217.8 billion.2

Job seeker statistic.

  • Worker shortages – At the beginning of 2025, job openings outnumbered job seekers by more than 1 million3. More jobs than workers is an issue that is impacting many different sectors. Nearly all senior living operators have reported trouble finding workers4, and manufacturing, food service, retail, logistics, and other industries are all reporting worker shortages. Factors contributing to the shortages include skills gaps, aging work forces, need for workplace flexibility, low pay and high stress environments.

Worker shortages can lead to situations that affect safety by leading to situations where:

    • Unqualified workers are hired
    • Fatigue, stress and burnout can impact worker attention
    • High turnover at all levels of the organization begins to impact their culture of safety5
  • Cyber attacks – Cyber criminals have stepped up their activity over the past few years. In 2023, there was a 72% increase in attacks since 2021, which previously held the record for number of attacks. This activity has been costly for businesses: a data breach, on average, costs $4.8 million6 and email compromises cost companies $2.9 billion in total losses in 2023.7
  • Supply chain and inflation – Persistent inflation above the Federal Reserve’s annual target of 2% has contributed to higher costs for goods and raw materials, and has pressured the bottom line for businesses since inflation spiked in 2022. There are also concerns that new rounds of tariffs could push costs higher. As an example of rising costs, a recent report from Verisk shows that reconstruction costs have climbed 63.7% since 2014.8 In addition, these costs rose 10.7% between 2023 and 2024, outpacing inflation that climbed 2.9% in 2024.

Actions to take

The concerns of business owners about the risks they face, and the increasing threats of large-scale events underscores the need to have conversations with them about protecting their workers, property and operations.

Business owners say distribution professionals can add value by communicating about risk issues and carrier-provided resources. The partnership among the agent, risk management professionals and business leaders is critical to help identify risk gaps and develop comprehensive plans that incorporate specialized protection solutions and meet the unique operational needs of the organization.

Nationwide’s Risk Management and Client Services teams have industry-specific expertise, and resource libraries on mylosscontrolservices.com contain information and safety materials whether they need to create a business continuity program, develop vehicle safety programs, or implement a water mitigation program.

You can share the following libraries with clients to help them take steps to reduce the specific risks that they face:

More resources are available on mylosscontrolservices.com.

Citations/Disclaimers

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