Why risk management still isn’t for everyone

For decades, the insurance industry has described risk management as essential to controlling loss, reducing claims and protecting people. Yet in practice, structured risk management support remains uneven across the UK.

Large organisations often receive regular surveys, tailored guidance and ongoing engagement from insurers. Smaller businesses rarely do, despite facing many of the same exposures. According to a survey by Hiscox, around one-third of UK SMEs lack any formal risk management policy at all.

“It is one of the biggest contradictions in the market,” said Johnny Thomson, Head of Strategic Planning at RiskSTOP. “The organisations with the greatest resources receive the most support and those with the least are often left to navigate risk alone.”

A system designed for large risks

The traditional risk engineering model is built around high-value policyholders. Insurers allocate surveyors and technical consultants where the financial exposure is greatest. The logic is understandable, but it leaves many small and medium-sized enterprises without meaningful access to structured risk improvements.

Industry reviews have highlighted this gap for years. Reports from the Federation of Small Businesses have shown that many smaller firms lack clear fire strategies, business continuity plans or formal safety controls, not because of unwillingness but because of limited guidance and resources. In fact, 38% of UK businesses do not have a suitable fire risk assessment in place, and nearly half have no formal continuity or crisis plan.

The result is a growing divide. Larger organisations reduce losses through prevention and resilience, while smaller firms remain more exposed to incidents that could have been prevented with timely advice.

A market wide issue

Claims data across several UK insurers shows that a significant share of avoidable loss comes from smaller risks that never receive onsite support. For instance, around 7,000 workplace fires occur annually in the UK, with faulty or misused electrical equipment accounting for nearly 1 in 5 of those, a risk often preventable with simple guidance.

Liability claims arising from slips, trips and workplace injuries continue to burden businesses that have never received professionally guided loss prevention advice. UK insurers pay out approximately £7.6 million per day on liability claims, many triggered by everyday hazards that better risk management could have mitigated.

This creates inefficiency for insurers and brokers and heightened vulnerability for the businesses themselves.

Democratising access to risk management

There is now a growing industry conversation about how to make risk management available to all policyholders, not just the largest. Digital tools, remote assessments and simplified risk frameworks are helping insurers extend meaningful support at scale. Collaborative models between brokers, insurers and risk partners are also emerging to ensure that businesses of every size receive consistent advice.

“Prevention only works when everyone can access it,” Johnny Thomson added. “If the industry wants fewer claims, more resilient customers and better outcomes, then risk management cannot remain a privilege. It has to become standard practice.”

Time for a shift

The case for democratising risk management is not only moral. It is financial, operational and strategic. When more businesses understand their risks and take practical steps to reduce them, the whole insurance ecosystem benefits.