December 20, 2019 by Jason Contant
The risk landscape for Canadian businesses continues to evolve rapidly, but that doesn’t mean companies have to be caught unprepared.
These evolving risks include everything from technology and cybersecurity to shifting regulatory considerations, reputational risk, employee liability, data and privacy protection and environmental considerations, Phil Baker, head of specialist insurer Beazley Canada, told Canadian Underwriter Thursday.
“Understanding the risks your business faces is the first step,” Baker said. “It’s then critical to evaluate how best to mitigate and monitor risks, while ensuring you have contingency plans in place, and this includes having the right insurance coverage. This will allow businesses to react more quickly in the event of a crisis. As a global insurer, Beazley has the experience and local expertise to help Canadian businesses of all sizes mitigate the risks 2020 and beyond brings.”
Here are the six risks in more detail:
Evolving risks in a data-driven business era
The explosive growth in big data is cited as being one of the most significant game changers for businesses looking forward. This comes with implications around cybersecurity, data protection and privacy. In 2020, we are likely to see increased focus and investment in technology security, and a continued challenge with businesses competing for talent specializing in this space.
More stringent data protection and privacy regulations
We are likely to see evolving regulatory and compliance requirements around data projection and privacy, Baker said. Subsequent to European Union’s General Data Projection Regulation (GDPR) in May 2018, it has triggered a review of data privacy regulations. Businesses should anticipate the continued evolution of regulations that will impact Canadian businesses.
Third-party liability risks
Not only do businesses need to protect their organization to mitigate risks, but increasingly managing third-party risks will be key. As businesses become more connected, increased sharing of data, systems and technology means they need to evolve their risk processes. For example, 24% of ransomware incidents reported in Q3 were caused by a vendor or managed service provider, Beazley said.
Workplace and employee liability
Increasingly, employees, business partners and stakeholders, consumers and the public are holding individuals and companies accountable to unacceptable behavior or conduct. Businesses and employees must rethink their approach to risk around this evolving liability.
From plastics to carbon emissions, there is an increased focus on the environmental impact from companies and pressure to demonstrate environmental responsibility. But beyond good environmental stewardship, environmental liability will continue to be a focus area for businesses, including changing weather patterns, pollution considerations, transportation hazards, with a heightened focus on environmental responsibility more generally.
To survive in a hyper-connected world, businesses need to place high priority on crisis and contingency planning. From cyber breaches, to the #MeToo movement, we have seen negative news amplified through media and social media at record speeds. For businesses and executives, risk management can be used as a tool to create value and competitive advantage. Organizations are expanding their approaches to focus on vigilance, resilience, and risk insurance.