In 2023, UK businesses will face significant challenges, including major changes in the economy and the emergence of new technologies like artificial intelligence. Tradesman Saver, a leading insurance provider for small businesses and tradespeople, has identified the top five risks that UK businesses are likely to face in the coming year. These risks have been determined based on insights from risk management experts across 94 countries and territories.
- Cyber Incidents: Cyber incidents, including data breaches, ransomware attacks, and IT outages, continue to be the top risk for UK businesses. With ongoing geopolitical tensions and conflicts in Ukraine, the likelihood of large-scale cyber-attacks is increasing. Data breaches can be particularly damaging for companies due to the potential for significant notification costs, fines, penalties, and reputational damage. Small businesses are especially 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, such as supply chain disruption, is another major risk for UK companies. Despite efforts to diversify business models and supply chains in the aftermath of the pandemic, disruptions persist. Ongoing turmoil in Ukraine and global supply chain issues, such as semiconductor shortages, are placing further strain on businesses.
- Macro-Economic Developments: Macro-economic developments, including inflation, deflation, and monetary policies, have emerged as a new risk for UK businesses in 2023. The simultaneous crises in the US, China, and Europe, along with the Russian invasion of Ukraine, have led to rising 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 stabilize.
- Energy Crisis: The energy crisis is a new entry for 2023 and has also impacted UK businesses. Energy prices have risen due to post-pandemic economic recovery, supply chain disruptions, and delayed maintenance work. The crisis intensified with Russia’s invasion of Ukraine, 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 workers remains a risk for UK businesses due to the Covid-19 pandemic and rising wage inflation. Many countries, including the UK, face a reduced workforce and high demand for labor. The situation is exacerbated by post-Brexit immigration rules, with the construction industry being among the hardest hit, with 75% of contractors experiencing recruitment issues.
Protect Your Business with Public Liability Insurance Tradesman Saver understands the challenges that UK businesses face and is committed to helping them navigate these risks by providing tailored insurance solutions. Public liability insurance can help protect your business against potential losses. To learn more about how Tradesman Saver can support your business, visit our website https://www.tradesmansaver.co.uk/public-liability-insurance/ or call our helpline for more information.
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