INSURANCE
Managing director Lee Elgie of Erimus Insurance Brokers .
PICTURE : TOM BANKS
RISK
MANAGEMENT
Teesside insurance specialist Erimus outlines the current risks local businesses are facing
The business landscape in the North- East has changed significantly over recent years , with the previously dominant heavy industry dying away and paving the way for start-up firms in sectors such as technology and renewable energy .
One great example is Teesworks rebuilding itself as a leading location for offshore wind , clean energy and advanced manufacturing . The business dynamic is also going to continue to change with the arrival of hundreds of government workers into Darlington over the coming years .
These changes , and the current economic environment , bring both challenges and opportunities to organisations in Teesside which are facing a range of new risks .
A study by Teesside-based insurance broker Erimus found that businesses in the area cited the cost of materials as their current top business risk – reflecting what business leaders felt across the rest of the UK and demonstrating the area is not alone in the economic issues it is facing .
Making up the top 10 risks to successful trading locally were employee retention and lack of skilled talent , supply chain issues and cost of transportation , cash flow and cybercrime .
Cost of materials topping the list of risks faced by businesses locally is perhaps unsurprising given the rate of inflation , the cost of energy and the supply chain issues we ’ ve seen as a result of the pandemic and Brexit . With a significant manufacturing industry base in the local area , firms in this sector will be feeling particularly vulnerable , but the reality is that all businesses will be impacted in some way or another .
Commenting on the study , Lee Elgie , managing director of Erimus Insurance Brokers , which looks after the insurance needs of thousands of local businesses in Teesside , said : “ Many of our clients are concerned about how they can protect their business from the cost of materials and supply chain problems . We ’ ve been working in Teesside supporting firms for over 35 years , so we really understand the challenges in the local economy .
“ There is , of course , no silver bullet , but businesses should take steps such as negotiating locked-in prices with suppliers and broadening their supply chain so they have more options if a supplier gets into trouble and can ’ t deliver as promised .
“ Organisations should also consider trade credit insurance . This protects the firm from financial loss if a supplier has financial issues and is unable to deliver goods which have either been paid in full , or in part .”
Cybercrime is also a growing threat to firms in Teesside . The increased focus on digitalisation , including a huge jump in the numbers of employees working remotely , which was driven by Covid-19 , has left many organisations at greater risk of falling foul of a cyber-attack .
The most common type of cyber-attack is ransomware , where a criminal targets employees with fake emails that look like they come from a genuine source .
The authorities have stepped up to help tackle the issue locally and the North East Resilience Centre is a police-led initiative to help businesses across the region better prepare for cybercrime and what to do if they fall victim . Services are available free to firms based in the North-East .
Lee advised : “ Risk management is an important tool in a firm ’ s defence against cybercrime .
“ Businesses should speak to a cyber-specialist who can advise on the preventative steps they could take . However , it ’ s an unfortunate fact that many attacks succeed simply through human error , so the risk cannot be mitigated entirely . Businesses should consider cyber insurance , which will cover them from the impact of an attack .”
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