Embroker Team September 20, 2023 83 min read

Test Your Business Risk IQ

Business man slipping on wet floor while piling blocks for a successful business together, the blocks are off balance due to business risks

Business owners today have many advantages over past generations of entrepreneurs, but perhaps the biggest of these advantages is access to professional research. Whereas entrepreneurs of the past could only guess at what obstacles their businesses might encounter, today’s business owners can compile full risk reports before they even open their doors.

However, research also shows us that humans, by nature, are more likely to make decisions based on emotions and beliefs than on data, even when presented with the facts. In our survey of 500+ business owners, CEOs, and startup founders, we found that these leaders overprepare for relatively uncommon risks while leaving their companies vulnerable to the threats they’re actually likely to encounter.

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Our Risk IQ Calculator compares the risk factors that apply to your business against the threats you’ve prioritized and prepared for. With this information, we can determine how well your protections align with the leading threats facing companies similar to yours. Once you’ve received your Risk IQ results, download the Big Risks for Small Businesses report to see how your preparations stack up against successful business owners and tech entrepreneurs.

Business Risk IQ Test


Which of the following applies to your business?

In which of the following industries does your business operate?

Which of the following does your business have?

Your risk factors:

    Your protections:

      Your blindspots:

        Download your results:

        Select at least 1

        Business Leaders Overlook Pressing Risks

        Were you surprised to learn you’re not as prepared as you thought? Don’t worry—our research shows that you’re far from alone. Even the most successful and experienced business leaders are surprisingly unaware when it comes to business risk.

        We can see an example of how skewed owners’ perceptions of risk are by taking a look at attitudes toward cyber attacks and cybersecurity.

        Research shows that over 40% of all cyber attacks target small businesses, and 61% of small businesses experienced at least one cyber attack in 2020. Despite this, 63% of our survey respondents said they believed their business was unlikely to face a data breach or ransomware attack.

        40% of all cyber attacks target small businesses

        In fact, cyber attacks—which are some of the most common and most expensive risks to small businesses—did not appear in the top three respondent concerns. Instead, respondents prioritized reputational harm, product or equipment malfunctions, and labor shortages or overworked employees.

        Not only are cybersecurity attacks more likely to occur than the risks respondents’ prioritized, but they’re also much more expensive when they do occur. In 2021 the average annual cost of cyberattacks for small businesses was $25,000, whereas reputational harm costs small businesses just $8,000 per incident to repair.

        If cybersecurity is one of your Risk IQ blind spots, you may want to dedicate some time to learning more about the biggest cyber threats businesses are likely to encounter in 2022. But cybersecurity is just one example—across the board, owners are preparing for the wrong risks and leaving their companies vulnerable to expensive attacks and threats.

        Leaders Need to Be More Involved in Risk Protection

        It’s not hard to understand why leaders are misinformed on threats to their businesses—according to our data, many aren’t actually involved in their company’s risk management process.

        We also asked business owners questions designed to determine how closely they pay attention to the details, costs, and changes to their business insurance policies. We were surprised to learn that an astounding 57% had not even read their insurance policies in full, and 1 in 5 weren’t actually sure who handled insurance issues within their company.

        1 in 5 business owners don't know how renewals are handled

        There’s nothing wrong with delegating risk decisions to in-house administrators or HR departments—our research shows that about 1 in 3 owners do so, and this can be a smart move since it frees up owners and founders to focus on broader company issues and goals. But when it comes to risks with the potential to bankrupt the company, it’s important that CEOs make it a priority to remain well-informed.

        So, what can you do to improve your Risk IQ? Start by taking a look at your blind spots and determining how you can add additional protections to those already in place. These preparedness tools can be expensive, so you may need to scale back on protections against less pressing threat risks in order to invest more where you’re most likely to get hit. If you find you need to add insurance policies or expand your coverage, bundling your policies can help keep costs low.

        Interested in learning more about how businesses handle risk? You can access our full research results by downloading the Big Risks for Small Businesses report. It takes a deeper dive into how small business owners approach issues like risk management, insurance enrollment, policy renewals and more. Our report also separates responses into small business owners and tech founders, providing a fascinating peek into how attitudes differ across industries.


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