Today’s technology companies are facing unprecedented challenges. You’re constantly under pressure to innovate, work smarter, and keep up with a continuously moving target of threats to your bottom line. Consider just a few of the challenges you face just to stay in business:
- Compliance with federal, state, and local regulations
- International political and economic uncertainties
- Cybersecurity and intellectual property infringement
- Attracting and retaining top talent
- Product liability suits
- The constant need for research and development investments
So what are your top risks?
That’s what the financial consulting firm BDO set out to find out for its 2015 BDO Technology RiskFactor Report. Each year the firm takes the pulse of various industries and analyzes their top risk factors. For the tech sector, the firm examined the most recent annual shareholder reports from the 100 largest publicly traded U.S. technology companies, ranking the top 25 risk factors in order of frequency cited.
Let’s take a look at a few of the top risks in the technology sector for 2016 and beyond:
- An evolving regulatory environment. As technology and business models evolve, the laws are also evolving, and regulatory agencies are stepping up their oversight. As a result, every company in the BDO survey cited concerns about their ability to comply with all the new laws, since noncompliance can wreak havoc on their profits and their reputation.
- Competition. With mergers and acquisitions and globalization being a fact of life in the tech industry, you’re facing increasing competition in product development, pricing, and human capital.
- Cybersecurity. This risk continues to explode, and it’s on the mind of every company in every industry now. The recent IRS data breach is just the latest in a long string of high profile security breaches, and the technology sector is increasingly apprehensive about cyber risks, as well as corporate copyright, intellectual property infringement, and trademark violations. So tech companies are ramping up their efforts to develop new ways of sharing data and communicating internally, more secure products and services, and technologies that help protect customers from attacks, among other strategies.
- Growing litigation risks. Product and service quality issues, equipment failures, manufacturing delays, recalls, and other product liability issues, along with patent infringement and intellectual property issues, are making costly and time-consuming litigation one of the fastest growing risks. Those in the industry are increasingly worried that innovation and investment in research and development will suffer.
See the BDO Technology RiskFactor Report for the complete list, and you can also download the infographic.
For these complex and evolving risks, you need robust and evolving financial protection.
It’s the nature of your technology business to take risks and make big promises. Doing business today without robust insurance protection simply isn’t an option. That’s why you need a partner like Heffernan’s insurance for technology companies and risk management in your corner. With our years of industry experience and team of specialized insurance, risk, and technology professionals, we have the expertise to protect your bottom line from today’s evolving risks.