U.S. middle-market businesses are most concerned about economic and financial risks, regulatory changes, technological disruptions and labor shortages—and only 54% feel highly protected against these threats, according to a Nationwide Agency Forward survey.

Seventy-eight percent of midsize business owners say evolving regulatory and safety standards have had an impact on their risk management needs, and 20% say they feel that their business is unprepared to respond to new regulations. Owners are most concerned about complying with data privacy and security requirements.

Midsize businesses' concerns come despite a high emphasis on risk management and safety planning. Eight in 10 mid-market business owners said their business has a dedicated safety budget, which averages about 6% of the total budget. Additionally, 9 in 10 have formal risk management policies in place—and review or update them at least once a year.

Many middle-market businesses are using technology to support their risk management and regulatory compliance. Nearly 2 in 3 (65%) use technology in specific risk management activities, although not comprehensively. Eleven percent report that technology is central to their risk management.

However, 1 in 5 business owners do not have a business continuity plan in place. “Despite nearly 90% of businesses having formal risk management policies that are regularly reviewed, a critical vulnerability remains: one in five businesses lack a business continuity plan," said Mark McGhiey, Nationwide's leader of commercial lines risk management. “This gap leaves them exposed to potential disruptions that could severely impact their operations."

“Agents can help identify and fill these gaps with commercial clients, partnering with them and carrier-provided risk management experts to develop and implement a comprehensive business continuity plan," McGhiey continued. “These efforts can significantly enhance clients' resilience and ensure they're prepared to navigate unexpected challenges."

Many business owners also struggle to see how their safety actions are valuable, the survey said. Only 51% of business owners currently view their risk management initiatives as effective. The top challenge with safety and risk management is the cost of safety measures, with 38% of respondents listing it as a challenge. Maintenance of safety equipment is second at 31%, and another 30% are challenged by finding the resources required for conducting regular safety assessments.

The concerns underscore the importance of connecting risk management with business strategy, the report said.

AnneMarie McPherson Spears is IA news editor.