Tradesman Saver, a prominent insurance provider for small businesses and tradespeople, has identified the top five risks that UK businesses are likely to encounter in 2023. These risks are based on insights from risk management experts across 94 countries and territories.
As the economy continues to grapple with the effects of the pandemic and the rise of new technologies such as artificial intelligence, businesses must be prepared to adapt their strategies to succeed in 2023. Here are the top five risks to be aware of:
- Cyber Incidents: Cyber incidents, such as data breaches, ransomware attacks, and IT outages, remain the number one risk for UK businesses. Ongoing geopolitical tensions and the conflict in Ukraine increase the likelihood of large-scale cyber-attacks. Small businesses are particularly vulnerable as they often have weaker security controls and fewer resources to handle the aftermath of a cyber attack.
- Business Interruption: Business interruption, which includes supply chain disruptions, is another major risk for UK companies. Despite efforts to diversify business models and supply chains in the aftermath of the pandemic, disruptions still occur. The turmoil in Ukraine and global supply chain issues like semiconductor shortages are putting additional pressure on businesses.
- Macro-Economic Developments: In 2023, macro-economic developments like inflation, deflation, and monetary policies have emerged as a new risk. The concurrent crises in the US, China, and Europe, as well as the Russian invasion of Ukraine, have resulted in rising energy prices and inflation. The UK is currently in a recession, with the economy expected to contract 0.7% in 2023. However, some experts predict a return to growth in 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 vulnerable to fluctuating international gas prices.
- Shortage of Skilled Workforce: The shortage of skilled workforce persists as a risk for UK businesses due to the Covid-19 pandemic and rising wage inflation. Many countries, including the UK, are facing a reduced workforce and high demand for labour. Post-Brexit immigration rules have exacerbated the situation. The construction industry has been hit hardest, with 75% of contractors experiencing recruitment issues.
Protect Your Business With Public Liability Insurance Tradesman Saver understands the importance of protecting your business against potential losses. We offer tailored insurance solutions, including public liability insurance, to help businesses navigate these risks. Visit our website https://www.tradesmansaver.co.uk/public-liability-insurance/ or call our helpline for more information.
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