Risky business alert

By Business Observer Staff
| 7:33 a.m. November 8, 2013
| 2 Free Articles Remaining!

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When an insurance company conducts a survey about how well firms mitigate risk, a self-serving element clearly abounds.

A new survey from the Chubb Group of Insurance Cos. nonetheless points out some alarming issues. The study, the Chubb 2013 Private Company Risk Survey, is based on interviews with 450 executives of U.S. firms in which at least 90% had less than $25 million in annual revenues. Results include:

Nearly three-fourths, 73% of respondents, use outside firms for employee-benefit plans. But less than half of the companies polled take measures to help reduce fiduciary liability exposure. That includes failing to adequately review administrative fees charged to the plans.

About one in five companies, 21%, use cloud computing to store and retrieve data. Of those companies, only 54%, however, have a response plan at the ready for cyber breaches and thefts, the survey reports.

More than four out of 10 companies, 42%, have broad policies against hiring people with criminal backgrounds — which is illegal in some states.

Less than half of the respondents, 49%, have a written social media usage policy for employees.

Chubb Group of Insurance Cos.Senior Vice President Tracey Vispoli says the results are a surprise, especially given how litigious some of these situations have become. “Many private companies have not taken the loss prevention measures and have not purchased the appropriate insurance to help insulate themselves from litigation, government fines and their related financial and reputational consequences,” Vispoli says in a statement.