Data losses and ransomware are top legal concerns for company directors, according to WTW and Clyde & Co’s Directors’ and Officers’ Liability Survey Report 2023.

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Economic risks and cyber threats are top of mind for directors of firms globally, according to broker WTW and law firm Clyde & Co.

Liability stemming from data losses and ransomware attacks online are particular concerns, finds the Directors’ and Officers’ Liability (D&O) Survey Report 2023, published by the two companies.

Economic risk was considered the top risk for businesses by 63% of respondents, closely followed by cyber risk on 62%, according to the survey, which polled company directors in 40 countries globally.

For the first time, the survey also broke down economic risk into three perils, inflation, recession and the job market with most global directors citing inflation as the biggest economic risk (69%), closely followed by recession (67%).

Geopolitical risk grew in importance, in fourth place, up from sixth a year ago.

“With a volatile business environment resulting from the current geopolitical uncertainty, it is no surprise that geopolitical risk is rising on the list of Directors’ concerns,” said Jeremy Wall, head of global financial, executive and professional risks, WTW.

“The advent of technology ensures that cyber will continue to be of major concern and we are certainly seeing more demand for cyber insurance as a result. We are delighted to launch this report as we know it is being sourced as a great resource to support directors and risk managers when refining their risk management strategies,” he added.

Climate change has made it into the top five risks for directors in Great Britain, where it is the number one risk, and Australasia, where it is ranked fourth, the report said.

D&O risks related to Covid-19 and Brexit, while still in the top five, decreased in importance.

James Cooper, partner, head of insurance, Clyde & Co said: “With companies and their leaders operating in an almost unprecedented climate of uncertainty, this year’s survey provides timely and valuable insights into the evolving risk landscape.

The report suggested its results were broadly consistent with 2022’s concerns, with cyber, data loss and cyber extortion continuing to dominate the highest ranks of risks for directors.

“There have been developments, however, with notable new risks including systems and controls, sufficient cyber expertise at board level and employee crime and cyber-crime as a sub-set of crime risks,” Cooper said.

“While the survey highlights geographical variations, it also sheds light on marked differences between how directors and risk managers at small companies are rating risk compared to those at large enterprises,” he continued.

“But regardless of business size, successfully navigating risk has never been more difficult. directors need a forward-looking view, to anticipate threats and challenges,” Cooper added.

The report itself can be found here.