Blog - Tag: Measured Risk Insurance Services
A Reminder of Your Workplace Violence Prevention Annual Obligations
As the one-year anniversary of California’s workplace violence prevention law approaches, employers will need to take steps to ensure their continued compliance.
The law requires all California employers with 10 or more staff to have a workplace violence prevention plan and to provide training to employees on the plan by July 1, 2024. It also requires employers to revisit the plan annually and conduct new training.
It’s important that employers comply with the law, as Cal/OSHA is actively enforcing all aspects of it during its standard workplace safety inspections. Noncompliance with SB 553 can result in fines ranging from $18,000 to $25,000 per violation.
Here’s what employers need to focus on:
Updating the plan
Employers should revisit their workplace violence prevention plan annually to make sure it’s up to date.
Under the law, an effective workplace violence prevention plan:
- Identifies who is responsible for implementing and managing the plan. This may need to be updated if a new person is assigned this responsibility.
- Includes details for how to accept and respond to reports of workplace violence. This may need to be changed if there is a new person to report incidents to.
- Prohibits retaliation against employees who report incidents of workplace violence.
- Includes details for communicating with employees regarding workplace violence matters, including how to report a violent incident, threat or other workplace violence concern; effective ways to alert employees to the presence of a workplace violence emergency; and how to obtain help from staff assigned to respond and/or law enforcement (personnel may have changed, so the plan may need updating).
- Lays out instructions for responding to actual and potential emergencies.
- Includes procedures for post-incident response and investigation.
- Requires the employer to provide effective training upon hire and once a year thereafter.
- Requires the employer to identify, evaluate and correct workplace violence hazards. This may need to be updated if a new hazard is identified.
- Requires the employer to post incident response and investigations.
Training
Employers are required to train their employees on the plan and provide training materials that are easy to understand. Training must be conducted upon hire and once a year thereafter.
Training must include:
- Familiarizing employees with the plan and how to participate in developing and implementing it.
- Definitions and requirements of California Labor Code Section 6401.9, which codifies the workplace violence prevention law.
- Information on how to report workplace violence incidents without fear of retaliation.
- Job-specific violence hazards and preventive measures.
- Explaining the purpose of the violent incident log and how to obtain related records.
- The opportunity for employees to ask questions and get more information about your plan.
Record-keeping
Employers are required to keep up-to-date records, including any incidents in the past year. Required records include:
- Workplace violence hazard identification, evaluations and any corrections made, which must be maintained for at least five years.
- Training, which must be kept for one year.
- Violent incidents, which must be kept for at least five years.
- Workplace violence incident investigations, which must be kept for at least five years.
A final word
While we are only one year into the law, it’s important that employers foster open communication and encourage employees to report potential hazards and concerns without fear of retaliation.
Also, regularly check for Cal/OSHA updates and other agencies to ensure you are compliant. If you need assistance, consider partnering with compliance experts to streamline the process.
Why Your Business May Need Pollution Insurance
Many businesses that produce some type of pollutant throughout the course of daily business operations don’t know they are doing so.
Others know they are producing pollutants and have processes and safeguards in place to reduce their release into the environment. A business can be held liable for some very costly damages when these byproducts pollute another property or harm another individual.
Pollution liability clauses were once part of general liability policies, but the extensive asbestos problems in the 1970s spurred most insurers to remove pollution protection from their general liability policies.
Today, pollution liability coverage is obtained through a separate pollution insurance policy. Pollution insurance policies are written for businesses of all sizes, shapes, and forms – from pig farms and printers to apartment complexes, salons, and dry-cleaning businesses.
Why pollution insurance?
Many businesses run the risk of creating pollution during normal daily operations.
There’s also a risk from any existing pollution already on a business’s site of operation. In either case, a business could be held liable if its pollution ends up on a third party’s property, causes damage to the property or harms an individual.
Without insurance, the business would be on the hook for paying for those damages out of pocket.
What do policies cover?
The basic premise of a pollution policy is that an insured party gets a claim related to damages caused by pollution it caused.
This insurance will protect your financial interests in the event a clean-up becomes necessary. Buying pollution liability insurance will cover your interests against lawsuits where a third party could be injured by a toxic substance produced as a result of your work.
Like most types of insurance, the specifics of a pollution policy can vary somewhat from insurer to insurer.
Depending on the insurer, a pollution policy will typically cover
- Damage to properties and individuals
- The cost of cleaning up pollution on a third party’s property
- Pollution incidents that occurred after the policy was
- Investigative, legal, and court costs should the claim enter the legal system.
Who needs coverage?
Businesses that have risks related to the handling of pollutants and hazardous materials, design professionals who work with projects where there are environmental issues as well as those who own and occupy premises that have environmental issues need pollution liability insurance.
This includes:
- Property owners and tenants whose buildings and land have a history of having pollutants on the property or premises. This would include a building on land that had an underground storage tank that leaked fuel oil before it was removed, contaminating the soil.
- Contractors such as roofers who handle pollutants like tar as a part of their operations need contractors pollution liability insurance to cover damage resulting from a pollution incident.
- Architects and engineers who are involved in projects that have issues related to pollutants need to add pollution liability to their errors and omissions insurance policy to manage the risk of making a mistake regarding the presence or absence of pollution issues as they plan and execute a project.
The takeaway
Don’t overlook pollution insurance as an important element of risk management. Should any questions or concerns about pollution insurance and insurance requirements arise, call us.
10 Tips for Dealing with OSHA
When OSHA shows up, it’s not the time to figure things out on the fly. Whether you’re in construction, manufacturing or any other field with safety exposure, knowing the ground rules can make all the difference between a successful visit or one where you leave yourself exposed to penalties and a drawn-out appeals process.
If you aren’t careful and prepared, fines can quickly pile up. Here’s a quick guide to help you handle inspections, citations and communication with OSHA before, during and after they step on site.
1. Ensure you have a walkaround rep
Under OSHA regulations, you are allowed to have someone represent you during an OSHA inspection — yes, even an attorney. It’s a smart move to assign someone in advance who knows your operations and safety protocols and can speak on your behalf.
2. Sit in on manager interviews
OSHA has the right to interview members of your team. If they interview one of your managers or supervisors, you have the right to be present. It’s a good idea to have a company rep or legal counsel there to help ensure the facts are clear and accurate
However, if they decide to interview a non-managerial employee, you do not have the right to have a manager present.
3. Employees have choices too
Non-supervisory employees can choose to speak with OSHA privately, but they don’t have to. They have the right to refuse to participate in an interview with OSHA and end an interview at any time. They can also refuse to allow OSHA to record the meeting.
Conversely, you cannot take retaliatory action against an employee who agrees to be interviewed.
4. There’s a six-month deadline for citations
OSHA can issue citations up to six months after a violation occurs. However, if it later learns you concealed a violation or misled them, the clock resets to when they learn of the subterfuge. If you don’t hear back in the first month or two after an inspection, you are not out of the woods for several more months.
5. You have 15 working days to respond
If you get a citation, the clock starts ticking. You have 15 business days to formally contest it. But you also have the option to negotiate a resolution before that deadline by requesting an informal conference, which can sometimes be a faster and less expensive option. Employers often use these informal conferences to negotiate the settlement of a citation before resorting to legal remedies in a formal contest.
6. No injury? You can still be cited
A workplace injury might bring OSHA in the door, but they can cite you for any unsafe condition they find during the inspection — even if no one was hurt or the issue wasn’t what prompted the visit.
7. “Not my worker” isn’t always a defense
On shared job sites, you can be cited for hazards affecting another company’s employees under OSHA’s multi-employer doctrine. If your team creates or controls a risk, such as the owner of a construction project, you’re potentially responsible — even if the injured worker is a subcontractor’s employee.
8. Hazards can be cited, even without a rule
Under OSHA’s general duty clause, it can cite you for a serious hazard even if no specific standard exists — if you haven’t taken reasonable steps to prevent or abate the risk.
9. Citations don’t have to be detailed
OSHA doesn’t need to spell out every detail in a citation. As long as you get fair notice of what’s being alleged, you’ll need to get further clarity through the legal or discovery process.
10. Request inspection records using a FOIA request
You can request OSHA’s inspection records using a Freedom of Information Act request. These files can provide insight into why OSHA took certain actions and help you better prepare for what comes next.
Stay proactive, not reactive
Having a game plan for an OSHA inspection is smart, especially for employers in higher-risk industries. Clear communication, proper documentation and knowing your rights can protect your company and your team.
Check Subcontractors’ Insurance Policies
Did you know your firm can be held liable under your own workers’ comp policy if a subcontractor’s employee is injured? Courts have ruled time and again that if a company hires a subcontractor without coverage and an employee gets hurt on the job, the injured worker can seek coverage under the hiring company’s policy.
In many cases, an injured worker may even be a third- of fourth-level contractor, but if none of your subcontractors are carrying workers’ comp, a claim can hit your own policy. This scenario is even more likely if your firm, as the main contractor, has substantial control over the sub’s employees.
To determine coverage, courts generally start with the sub whose employee was injured and move up the chain until they find a valid workers’ comp policy.
Protect yourself by requiring your subcontractors to have a certificate of insurance. But don’t stop there; you should call the insurance carrier to see if the certificate is valid.
You can check also with your state’s contractor licensing to see if your subcontractor has workers’ comp coverage.
FAIR Plan Commercial Property Coverage Limits to Rise
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.
If Your Firm Is Sued for Discrimination, Act Fast to Check EEOC Complaint
Employers that are hit with a discrimination complaint must act fast to compare the allegations in the lawsuit to the earlier complaint the worker filed to the Equal Employment Opportunity Commission.
If the employer can find that the allegations in the complaint filed with the EEOC do not match those in the subsequent lawsuit filed by the worker, it can quickly move to have the case dismissed, but if it waits too long, it loses the chance.
Under procedural rules, employees filing suit under Title VII Title VII of the Civil Rights Act of 1964 must first file a complaint with the EEOC.
The decision that paved the way for this new procedural rule was a unanimous U.S. Supreme Court ruling in the case of Fort Bend County vs. Lois M. Davis in 2019.
The ruling means that employers that are sued for discrimination under Title VII have a limited amount of time to challenge the lawsuit if the allegations differ in any way from the original EEOC complaint. If they act fast, then they stand a good chance of convincing the court to throw out the complaint.
However, if an employer dawdles and waits too long to challenge the case if they find a discrepancy, they may lose the opportunity.
If the employer in this case had acted quickly, it would never have gone to the Supreme Court, legal experts say.
The case details
An IT worker in Texas had reported that her director was sexually harassing her, and after an investigation he was fired. But after that, her supervisors began retaliating by cutting back on her work responsibilities. She filed a charge with the EEOC and, while the charge was pending, she was told to report to work on a Sunday. She refused and went to church instead.
She tried to supplement her allegations and wrote the word “religion” by hand on her EEOC intake questionnaire, but she didn’t change her formal charge document by adding that word.
The case went to trial and was appealed, and then it was sent back to the local U.S. District Court to decide the remaining charge of religious discrimination. The case had been in the courts for three years at that point.
That’s when her former employer asserted that the District Court didn’t have jurisdiction of the case because she had failed to state the claim in her EEOC charge papers. That issue was taken all the way to the Supreme court, which wrote in its decision that an objection to a charge because of a discrepancy may be forfeited “if the party asserting the rule waited too long to raise the point.”
The takeaway
If your organization is the target of a discrimination lawsuit, make sure to check the original EEOC charge for any discrepancies. If there are any, you can consult with your lawyers about filing a motion to have the complaint dismissed.
OSHA Finalizes Rule Requiring Construction PPE to “Properly Fit’ All Workers
Fed-OSHA has finalized a new regulation that requires personal protective equipment for construction workers to be properly fitting.
The lack of access to properly fitting PPE for smaller-framed construction workers — especially women — has been a perennial problem, as ill-fitting gear may not protect employees adequately in case of an incident. The new standard explicitly states that PPE must fit properly to protect workers from workplace hazards.
Often, the industry has just purchased smaller gear for female workers, but that hasn’t worked well because women’s bodies have more variations in size and shape.
What the new standard says
While the new standard does not define what a “proper fit” is, OSHA, in its proposal of the standard, clarified that the phrase means “the PPE is the appropriate size to provide an employee with the necessary protection from hazards and does not create additional safety and health hazards arising from being either too small or too large.”
Under the new rule, construction employers will be required to provide PPE in various sizes and designs that accommodate a diverse workforce. It requires that they assess the fit of PPE for each worker individually. The fit must address different body shapes, proportions and size and applies to all types of PPE, such as:
- Hard hats
- Gloves
- Goggles and safety glasses
- Safety shoes
- Helmets
- Harnesses
- Coveralls
- Vests
- Respirators
- Hearing protection devices
- Boots
The rule applies to PPE that an employer provides to its workers, as well as PPE purchased directly by a worker for personal use.
Employers are also required to incorporate the importance of properly fitting PPE into their training regimens, including:
- Guiding workers on how to adjust the equipment,
- How to recognize when PPE is ill-fitting and
- How to request replacement gear if a worker’s PPE does not fit.
Record-keeping is also required. To comply, construction employers should maintain comprehensive records of their PPE compliance efforts, including documenting:
- PPE assessments,
- Inspections,
- Training sessions and
- Any instances where PPE was replaced or adjusted for proper fit.
The standard applies to all construction companies; there are no exceptions based on size.
Dangers of ill-fitting PPE
- Sleeves of protective clothing that are too long or gloves that do not fit properly may make it difficult to use tools or control equipment, putting other workers at risk of exposure to hazards.
- The legs of a protective garment that are too long could cause tripping hazards and affect others working near the wearer.
- A loose harness when working at elevations may not properly suppress a person’s fall and may get caught up in scaffolding and equipment.
- Goggles worn by an employee with a small face may leave gaps at the temples, allowing flying debris from a machine to enter the eyes.
- Gloves that are too large have a number of issues: the fingers are too long and too wide, the palm area is too big and the cuffs allow sawdust to fill the fingers. Someone wearing such ill-fitting gloves risks getting their fingers caught in machinery or pinched when stacking or carrying lumber.
The takeaway
Manufacturers already make PPE in various sizes, but finding properly fitting PPE for workers may be difficult.
Fortunately, The Center for Construction Research and Training has created a list of manufacturers and suppliers of PPE for female, nonbinary and transgender workers. It includes links to firms that focus specifically on women’s wear and the products they offer.
FAIR Plan increases Commercial Property Limits
California Insurance Commissioner Ricardo Lara has approved a request by the FAIR Plan to increase commercial property coverage limits.
The move is aimed at ensuring that commercial facilities insured by the FAIR Plan are not underinsured, which can be devastating if they suffer a total loss.
Under the new limit, the FAIR Plan will create a new “high-value” commercial property coverage option for larger housing developments, farms and businesses with multiple buildings at one location.
The new limits will be up to $20 million per building, with a total maximum limit of $100 million per location — up from the current limit of $20 million per location. The FAIR Plan must make these new coverage limits available to all eligible applicants for both new and renewal policies before July 26, 2025.
The decision comes as commercial property rates continue rising due to inflationary pressures, particularly for companies in areas considered urban-wildland interfaces.
Insurers have pulled back on underwriting commercial properties as well as homes in the state due to increasingly destructive wildfires and their inability to get rate increase requests approved by the Department of Insurance.
Businesses located in wildfire-prone areas and those in smaller towns have found it increasingly difficult to secure coverage. If they are unable to secure coverage with a private insurer, their only option is the FAIR Plan.
FAIR Plan policies are not a complete replacement of a commercial property insurance policy. These are named peril policies, which provides coverage only for damage caused by the specific causes of loss listed in the policy:
- Fire
- Lightning
- Internal explosion
Optional coverages are available at an additional cost, such as for vandalism and malicious mischief.
Comparatively, typical commercial policies offer the following:
Basic form policies. They provide the least coverage, and usually cover damage caused by fire, windstorms, hail, lightning, explosions, smoke, vandalism, sprinkler leakage, aircraft and vehicle collisions, riots and civil commotion, sinkholes and volcanoes.
Broad form policies. These policies usually cover the causes of loss included in the basic form, as well as damage from leaking appliances, structural collapses, falling objects and the weight of ice, sleet or snow.
If you must go to the FAIR Plan, we can arrange for a “differences in conditions” policy that will cover the areas in which the plan is deficient compared to a commercial property policy.
The FAIR Plan will cover the following commercial structures:
Habitational buildings — Buildings with five or more habitational units, such as apartment buildings, hotels or motels.
Retail establishments — Shops such as boutiques, salons, bakeries and convenience stores.
Manufacturing — Companies that manufacture most types of products.
Office buildings — Offices for professionals such as design firms, doctors, lawyers, architects, consultants or other office-based functions.
Buildings under construction — Residential and commercial buildings under construction from the ground up.
Farms and wineries — Basic property insurance for commercial farms, wineries and ranches, not including coverage for crops and livestock.
A final word
The higher limits will come as a relief to many businesses in California whose properties’ replacement costs far exceeded the FAIR Plan limits. That said, premiums remain high under the FAIR Plan.
Besides the FAIR Plan, there is another option if you can’t find coverage. We can try to find coverage in the “non-admitted” market, which consists of global insurance giants like Lloyd’s of London.
These entities are not licensed in California, but they can still cover properties in the state, which we can access through a surplus lines broker.
More Contractors Increase Deductibles to Reduce Insurance Premiums
As construction projects become larger and more complicated, contractors are taking on more of the risk by increasing their builder’s risk insurance deductibles, according to a recent report.
Michael Cusack, executive vice president of insurance broker Alliant Specialty, told Insurance Business magazine that contractors are willing to take on more of the risk as those that have strong internal risk management regimens will be rewarded with lower premiums, particularly if they can stave off expensive claims.
There are a number of factors at play that are driving this transfer of risk:
- Claims costs are skyrocketing as the cost of rebuilding and materials has continued rising.
- Increasing litigation.
- Larger and larger liability lawsuit settlements and jury awards, and an increase in “nuclear” verdicts of $10 million and more.
“Contractors are taking on more deductible risk and manage that risk effectively using in-house protocols, and the ones that can do that will be the most successful,” Cusack told the trade publication.
“Construction jobs are getting much bigger, and the risks are becoming more complicated. If contractors can develop the systems and the personnel to manage risk, they can do it more efficiently and therefore be rewarded for that,” he explained.
The reason that you carry contractor insurance coverage in the first place is to protect your business from an accident or incident that could be financially devastating, such as a fire that wipes out all of your progress and destroys the materials and supplies that you had stored on-site.
Considerations
Increasing a deductible obviously comes with risk, particularly if you end up having multiple claims.
Raising your deductible amounts can be a smart business move that saves you money on your monthly or yearly premium payments. The extra money can help you grow your business, invest in new equipment, and even increase your available cash flow. But the best use of the extra cash is to create a contingency fund that you can draw on in case you incur a claim.
If you are comfortable assuming some additional risk yourself, and have resources you can draw on if they’re needed, talk to us about the possibility of raising your deductible. If the savings are enough to cover the deductibles on one or two claims, it may be worth making the change.
To make taking on more risk financially viable, you’ll have to prioritize risk management at your worksites. Emphasize the importance of safety to your supervisors, crew members and subcontractors.
By conducting regular safety training, providing personal protective equipment and strictly enforcing safe work practices, you can reduce the risk of on-site accidents and minimize damage and injury claims.
One other major risk to contractors is theft and vandalism. To lower this risk, builders have been erecting fences and walls around worksites since the dawn of construction. Today, there are cost-effective solutions to increase site security and reduce risks, such as:
- Online cameras and smart sensors on the job site can enable continuous monitoring for unauthorized access, unlawful activities, CO2 levels and real-time water leak detection systems like WINT’s water intelligence platform.
- Adequate lighting is much cheaper to procure, and built-in motion sensors can help save energy (while deterring potential trespassers to the site).
- GPS tracking tags on vehicles, equipment and even valuable materials can make it easier to recover them if they are stolen.
- Mobile applications for your workforce management can be a helpful tool in creating ongoing and interactive safety training, and risk-reporting programs to reduce the risks of human error and negligence.
Talk to us first
Builder’s risk premium calculations can be complex, and taking the step to increase your deductible has to be done with forethought and care.
Call us to review your policies before renewal and we can do a deep dive into your policy and risk management practices to see if increasing your deductible is a good move for you.
Top Eight Business Risks for 2025
One of the keys to running a successful business is having in place a robust risk management system to ensure your company can guard against a growing number of threats that can derail operations or cause significant losses.
While each industry and company have different risks they face, a recent survey collected responses from risk managers around the world to identify the top risks facing businesses.
The “Allianz Risk Barometer 2025” highlights the key threats for organizations in an increasingly interconnected and volatile environment.
Below are the top eight risks in 2025 and what you can do to protect against them.
1. Cyber incidents
Cyber risks like ransomware attacks, data breaches and IT outages remain the number one threat globally. With AI accelerating the sophistication of attacks, businesses have to double down on protection.
What you can do — Invest in robust cyber-security measures and training employees on how to detect threats and avoid clicking on links that contain malicious code. Regularly update systems, conduct penetration testing and educate staff on cyber hygiene.
2. Business interruption
Supply chain disruptions, often triggered by cyberattacks or natural disasters, have consistently ranked high. If one of your suppliers suddenly can’t provide you with goods your firm needs or a cyberattack affects your ability to function, you will lose money.
What you can do — Diversify suppliers, explore local sourcing and implement business continuity plans that include how to respond to each possible issue that could result in disruption to operations or sales.
3. Natural catastrophes
Events like hurricanes, wildfires, convective storms and flooding can cause significant losses, be that from damage to property and assets, injury to staff, employees being unable to work or business interruption.
What you can do — Put in place a disaster recovery plan that includes how members of your staff will communicate, possible alternative locations for operations, and how to protect your facilities. Evaluate disaster preparedness and explore insurance solutions.
4. Changes in laws, regulations
Regulatory shifts, especially around sustainability and emerging technologies like AI, are creating compliance challenges. Businesses will be faced with plenty of uncertainty under a new Trump presidency, considering his plans to pursue deregulation.
While a boon for business, it could lead to confusion, particularly for those who operate in blue states. As well, the new president’s promises of raising tariffs could lead to higher costs for many businesses that source products, parts and machinery from abroad.
What you can do — It’s important that you stay on top of regulatory and legal changes to avoid penalties or lawsuits. Engage legal advisors or compliance experts to navigate changing laws.
5. Climate change — The physical and operational impacts of climate change, such as extreme weather and resource scarcity, are intensifying and businesses need to harden their operations to cope.
According to the report: “Extreme temperatures can drive up energy demand, which is especially critical for industries reliant on cooling systems, potentially leading to operational cost increases. Water scarcity can threaten businesses reliant on water for operations, while biodiversity loss undermines ecosystem services which many industries depend on, for example, agriculture or maintaining crop yields.”
What you can do — Many of the same preparations businesses can make for dealing with natural catastrophes can also be used for climate change resilience.
6. Fire and explosion
Fires remain a leading cause of business interruption, especially with the rise of lithium-ion battery incidents. “The degree of disruption can be very high, as it can take longer to recover from than many other perils,” the report states.
What you can do — Ensure that you conduct regular fire safety audits and training to staff, particularly if you store flammable materials on-site. Regularly update your fire prevention protocols and provide emergency response training.
7. Macroeconomic developments
Economic uncertainties, including inflation and fluctuating monetary policies, pose challenges for budgeting and forecasting. This will be especially true under the Trump administration as he sets out to reverse Biden’s policies and pursues tariffs that could lead to trade wars.
What you can do — Keep abreast of market trends and adapt to macroeconomic changes with flexible planning. Staying agile and diversifying revenue streams can mitigate risks.
8. Market developments
Many experts believe it is unlikely that there will be a major stock market correction in 2025. Recovering earnings and Trump’s plans for deregulation and strong fundamentals should support continued growth.
What you can do — Strategic planning and market analysis are critical if your organization is reliant on stock market gains.
The takeaway
The above list of risks was gleaned from a survey of companies around the world, but many of the risks also apply to U.S. firms.
It’s important that businesses take a structured approach to managing their risks and creating plans for all eventualities that may affect them. That requires buy-in from management and a focus on protecting the company’s revenue stream, physical and digital assets, employees and supply chains.