Taking Risks with Risk: Highlights from the Chubb 2010 Private Company Risk Survey
Monday, August 30, 2010
Are companies cutting back on insurance protection in order to reduce costs during a difficult economic climate? Even when it means assuming more risk?
For many privately owned companies, the answer appears to be yes.
According to the Chubb 2010 Private Risk Survey:
- Overall, the percentage of private companies purchasing various types of professional and management liability insurance policies fell in 2010 from 2007, the last time Chubb conducted its survey – a span of time that roughly encompasses the recent global financial crisis.
- Insurance purchase rates are fairly low – only about 1 in 4 private companies buy management liability, professional liability, or crime insurance policies.
- A gap apparently exists between executives’ understanding of risk and their companies’ willingness to attempt to transfer their risk through insurance.
When companies self-insure or ignore risk, they become the insurance company and need to manage that risk accordingly. Chubb’s survey shows that many private company executives seem to understand the gravity of certain exposures—in particular, employment practices liability and workplace fraud and, to a somewhat lesser extent, electronic security breaches and workplace violence.
TO VIEW HIGHLIGHTS FROM THE CHUBB 2010 PRIVATE COMPANY RISK SURVEY, CLICK HERE.
