INSURANCE
Advice – Gallagher ’ s Stockton office managing director Lee Elgie outlines why businesses should always consider risks and put measures in place to protect them .
PICTURE : CHRIS BOOTH
LIMIT YOUR RISK How ever-increasing threats can damage your business
Lee Elgie , managing director of Gallagher ’ s Stockton office , gives an overview of the business ’ s Look Ahead Report , which highlights some of 2024 ’ s biggest business challenges …
As with any part of your business , it ’ s crucial to stay ahead of the curve and adapt your insurance and riskmanagement strategy to the ever-changing risk landscape .
Gallagher ’ s recent Look Ahead Report gives a comprehensive outlook on 2024 , giving businesses the knowledge and insight they need to face the challenges and opportunities head on .
Over the next year , Teesside will see an exciting host of new projects and developments , including Teesside Retail Park , Captain Cook Square and the ongoing developments at Teesworks .
The projects will bring economic benefits to the region while creating local jobs , with Teesworks making the North-East home to the UK ’ s largest freeport , housing various commercial and industrial spaces , as well as manufacturing and renewable energy hubs . Over recent years , the North-East has seen a growth in industries including manufacturing , finance , renewable energy and technology , which is great news for the local economy . However , whatever sector a firm is trading in , it will face risks . Businesses across the UK have been grappling with economic uncertainty and this has only deepened , with the economy recently falling into a recession .
Retailers may also have been hit , with recent data from the ONS revealing that , during December 2023 , retail sales declined to a level not seen since January
2021 , when the UK was in lockdown .
Recent figures have shown that 47,000 UK business could be on the brink of collapse due to a 25 per cent increase in financial distress during the final three months of 2023 .
The rate of insolvencies increased during 2023 and Gallagher ’ s Look Ahead Report found that there is no sign of this slowing down .
If a customer goes insolvent , this can create the risk of unpaid invoices , while businesses could face increased supply chain costs if a supplier goes bust .
Similarly , if a competitor goes bust , it may seem like good news , but it can be harmful if both businesses share the same supplier who relies on that income to stay afloat .
Due to insolvencies posing a substantial risk to businesses , they should consider purchasing Trade Credit insurance .
This type of insurance protects businesses against customers failing to pay for goods or services provided on a credit basis , usually due to insolvency or lack of funds .
It can assist growth by supporting trade with unfamiliar customers or export markets .
As well as businesses having to navigate a difficult economic environment , they are also facing challenges related to extreme weather and cybersecurity .
Underinsurance could be exacerbated by extreme weather . For example , the
Charterfields Underinsurance Report found that 88 per cent of commercial properties across the UK are underinsured .
We are working with our clients who have experienced repeat weather-related losses , supporting them to mitigate the impact of these losses in the future .
Last year saw a concerning resurgence in ransomware attacks resulting in an increase in costly incidents for businesses across the UK .
Stealing and encrypting data remains the primary tactic used in ransomware attacks , while data extortion attacks , where data is stolen but not encrypted , are becoming increasingly common .
Furthermore , the use of AI is likely to amplify existing cyber-threats and will increase the speed and scope of attack .
2024 is gaining momentum and the risk landscape for businesses is evolving at the same pace .
Amid these external factors , it has never been more important for businesses to ensure they have the right insurance cover in place should the worst happen .
Gallagher ’ s dedicated teams work with businesses across a multitude of sectors to help manage risks and stay protected .
The North-East ’ s industries are set to thrive . However , it is crucial for businesses to carefully consider their risks and put measures in place to help them grow and succeed .
The voice of business in the Tees region | 125