Warren, NJ (PRWEB) October 30, 2013
Many private companies have not implemented risk management practices that can help protect them from exposure to lawsuits and government fines, a survey by the Chubb Group of Insurance Companies has found.
According to Chubb’s 2013 Private Company Survey:
· Seventy-three percent of companies use outside service providers to administer their employee benefit plans. Yet, only 46% of private companies take measures that can help reduce their fiduciary liability exposure, including adequately reviewing administrative fees being charged to their plan and assessing whether the plan operates in the beneficiaries’ best interests.
· Twenty-one percent of companies use cloud providers to store and retrieve data. Of those, only 54% have an incident response plan for cyber breaches, including the theft of confidential customer information.
· Forty-two percent of the companies have a broad exclusionary policy against hiring employees with criminal backgrounds, a violation of some states’ laws.
· Sixty-eight percent of the companies use social media—up from 39% in 2010—but only 12% are concerned that they will be sued for allegedly making defamatory posts, and only 49% have a written social media usage policy for their employees.
“Many private companies have not taken the loss prevention measures and have not purchased the appropriate insurance to help insulate themselves from litigation, government fines and their related financial and reputational consequences,” said Tracey Vispoli, senior vice president and specialty insurance global customer segments leader, Chubb Group of Insurance Companies. “This is surprising in light of the fact that a large number of these firms have been sued in recent years by employees, customers, government agencies and other parties, and many are planning to participate in activities such as mergers that can increase their risk profile.”
In the past three years, nearly one-half of private companies surveyed have experienced at least one loss event related to directors and officers liability, employment practices liability, fiduciary liability, crime, workplace violence or cyber liability. In the next 12 months, 40% of the survey participants are likely to merge with or acquire another firm, reduce the size of their workforce and/or cut back on employee benefits.
The Chubb 2013 Private Company Risk Survey was conducted by Pollara, an independent public opinion and market research firm. The firm interviewed executives at 450 U.S. for-profit private companies, more than 90% of which had annual revenues of less than $25 million.
Since 1882, members of the Chubb Group of Insurance Companies have provided property and casualty insurance products to customers around the globe. These products are offered through a worldwide network of independent agents and brokers. The Chubb Group of Insurance Companies is known for financial strength, underwriting and loss-control expertise, tailoring products for the needs of high-net-worth individuals and commercial customers in niche markets and select industry segments, and outstanding claim service.
The Chubb Group of Insurance Companies is the marketing term used to describe several separately incorporated insurance companies under the common ownership of The Chubb Corporation. The Chubb Corporation is listed on the New York Stock Exchange (NYSE: CB) and, together with its subsidiaries, employs approximately 10,000 people throughout North America, Europe, Latin America, Asia and Australia. For more information regarding The Chubb Corporation, including a listing of the insurers in the Chubb Group of Insurance Companies, visit http://www.chubb.com.