Nearly One-Half of Private Firms Plan to Add Employees by Year End, Survey Finds
More Than One-Half Expect Employees to Steal; Most Ignore Data Breach Potential
WARREN, NJ, October 26, 2010—Nearly one-half (44%) of the executives who responded to the 2010 Chubb Private Company Risk Survey expect their firms to
add jobs by year end. More than half (54%) plan to expand product or service offerings, and 12% anticipate completing a major
“While such actions may spur business growth for private companies as they try to recover from difficult economic circumstances,
they may also increase their exposure to liability claims and lawsuits,” said Lisa Jones, vice president and private commercial
product manager for Chubb Specialty Insurance.
Thirty-six percent of respondents indicated that an employment practices liability (EPL) lawsuit was the loss event that would
cause the most financial damage to their company. Employee theft (18%) and a breach of electronically-stored private customer
data (15%) were also ranked as potentially damaging.
Nearly one in five (16%) of survey respondents anticipated that an EPL charge would be lodged against their firm in the next
12 months. Twenty-one experienced such an action during the past five years, with loss costs as much as $750,000.
Fifty-four percent anticipated that employees would steal company funds, equipment, inventory or merchandise in the next
12 months. This compares to 30% of companies experiencing such thefts in the past five years.
Ninety-two percent of Chubb survey respondents did not believe that it is likely that they would endure an electronic breach
of confidential customer information that would require them to comply with costly notification laws in more than 40 states.
Most (67%) of the companies in Chubb’s survey do not have an incident response plan for an electronic security breach. This
is despite their concern of the financial consequences of a breach, as well as a recent Symantec survey that found that 73%
of small and mid-sized companies experienced a cyber attack in 2009.
In other findings:
- One in six company executives (17%) believe it is likely their company will experience a directors and officers (D&O) liability-related
loss in the coming year. One in eight survey respondents (12%) experienced a D&O lawsuit within the past five years. Settlement
and litigation costs averaged $225,682, with some losses approaching $5 million.
- In the next 12 months, one in four (25%) of survey respondents indicated that their firm is likely to change their employee
benefits plans–an event which can spur fiduciary liability lawsuits.
The Chubb Private Company Risk Survey was conducted by Pollara, an independent public opinion and market research firm. The
firm interviewed decision makers at 451 U.S. for-profit companies, more than 90% of which had annual revenues of less than
$25 million. Chubb also sponsored the survey in 2007, 2005 and 2003.
The member insurers of the Chubb Group of Insurance Companies form a multi-billion dollar organization providing property
and casualty insurance for personal and commercial customers worldwide through 8,500 independent agents and brokers. Chubb's
global network includes branches and affiliates throughout North America, Europe, Latin America, Asia and Australia.