Running a business will always involve many types of risks. But in an increasingly volatile and interconnected landscape, businesses today face ever-increasing risks.
Some risks will have minimal impact on your business, while others can be catastrophic.
But is your business resilient to the risks it faces?
Business owners who invest time and money in risk management are better prepared to protect their business from risk or minimise the impact should the worst happen.
We’ll help you consider some of the top risks to your business in 2025, how to protect your business from them, and how to minimise the impact if some of these issues hit your business.
In this article, we’ll cover three of these risks to your business:
- Cyber risks.
- Environmental risks.
- People risks.
Cyber risks
Cyber incidents such as ransomware attacks, data breaches and IT outages are the top global risk for 2025,
Many SMEs believe that cyber-attacks won’t be targeted at them as cybercriminals are more likely to target large organisations. However, in reality, SMEs are a huge target for cybercriminals. For example, the Cyber Breaches Survey 2024 found that the risk of cyber attacks on medium-sized businesses is 70% (much higher than the average of 50% across all companies).
Cyber risk is increasing, and the way cyber-attacks target businesses is evolving. For many companies, cyber risk is increased by the rapid development of AI, and cybercriminals are already using AI to increase the volume and heighten the impact of cyber attacks on businesses.
Find out more about how cybercriminals are using AI here.
Find out more about the rise of ransomware and how to protect your business here.
How can I protect my business from cyber-attacks?
- Install all security updates.
- Make regular data backups.
- Educate your employees.
- Install security software on your network and all devices.
- Take out cyber insurance.
Should a cyber attack occur, your business is likely to incur costs. These costs include data recovery, IT support and advice, notifying victims of data breaches, and restoring systems.
Many businesses are now turning to cyber insurance, which helps them recover losses and associated costs - for instance, those resulting from large-scale breaches, business interruption, ransomware, and other types of cyberattacks.
It is worthwhile working with an independent local insurance broker, such as Harborough Portas, who can advise you on a wide range of cyber policies that will suit your business in terms of cover and budget.
Policies will cover costs, liabilities, and losses associated with cyber incidents. You must ensure the policy covers all potential risks, including ransomware attacks, data breaches, cyber-attacks, and business interruption. Other risks may be relevant to your business, so discuss these with your insurance broker.
Find out more about cyber insurance and why it is important for your business.
Environmental risks
2024 was another year of extreme weather and new climate records. According to the WMO4, last year is expected to be the hottest year on record, as global warming hit 1.5°C. It was also the fifth year in a row in which insured losses from natural disasters worldwide exceeded the US$100bn mark. *
The UK has seen an increase in floods in recent years, but businesses are also affected by global weather. Supply chains are disrupted due to adverse weather worldwide.
Find out more about protecting your business against flood here.
To understand what to do if your business is hit by a flood, click here.
Understand the winter risks to your business here.
Physical damage and business interruption are the two significant impacts of climate change. Business interruption insurance covers you for loss of income during periods when you cannot carry out business as usual due to an unexpected event. For example, if your business suffers a material damage claim, e.g., fire or flood, it will likely be unable to operate for some time. Contact us today to discuss business interruption insurance.
A Business Continuity Plan will identify your business's risks and the potential impact they will cause. It will detail how your business should deal with each incident, who to contact, and what steps you should take. It should help minimise the stress and panic when something happens and allow you, the business owner, and others in the business to deal with the consequences of any incident.
Find out more about the importance of business continuity planning here.
People risks
There is an increased risk when you set up a company, run a business with others, or employ key management staff. As a company director, you have increased responsibility, and there are many cases where Directors and Officers of a company may be held liable for their actions.
If someone decides to sue you as an individual, then your personal finances are at stake. This is where Directors and Officers Liability Insurance comes in. Directors and Officers Liability Insurance - also known as ‘Management Liability Insurance or D&O Insurance’ covers the cost of claims made against the company’s directors and key management (referred to as officers) for alleged ‘wrongful acts.’
Find out more about Directors and Officers Liability Insurance here.
Liability insurance covers the cost of compensation claims following fault or negligence brought against you or your business by clients, customers, shareholders, investors, or members of the public.
Employers' liability insurance is legally required under the Employers’ Liability Act 1969. It protects your employees if they get injured or become ill while working for your business.
Summary
Risk is inevitable in every business. What matters is how you minimise risk and protect yourself and your business from the impact of risks you face.
This article only covers three of the top risks that face your business. We’ll be writing articles about other risks as well.
For help and advice and to assess and protect against the risks in your business, contact Harborough Portas today. Call us on 0116 260 0506 or email mail@harboroughportas.com.
RELATED ARTICLES:
What is cyber insurance and why is it important?
AI and its impact on cyber attacks and cyber protection in your business.
The rise of ransomware and how to protect your business
Six reasons you need cyber insurance for your business
What should you do if your business is hit by a flood?
Winter risk management guidance
The importance of business continuity planning
What is Directors and Officers Liability Insurance and do I need it?
*Source: Allianz risk barometer 2025.
