The Hartford: Cybersecurity and economic challenges top concerns for businesses in 2025

By Mia MacGregor

May 16 - (The Insurer) - Cybersecurity remains the most pressing concern for U.S. businesses, but economic worries, and most notably the potential impact of tariffs, are increasingly top of mind, The Hartford’s 2025 Risk Monitor study has found.

The report, which compiles the answers from more than 400 U.S. business leaders, found that 72% of respondents viewed cybersecurity and cyberattacks as the top challenge facing them.

Additionally, 65% identified cybersecurity procedures as a significant risk mitigation priority, with 49% planning to develop or refine their cybersecurity practices in the next year.

Reflecting on the survey's findings, The Hartford's head of professional liability and cyber Anthony Dolce said "proactive preparation is essential for companies to safeguard against cybersecurity threats and breaches".

In addition to cybersecurity concerns, the report found that 69% of respondents are very concerned with economic trends, such as inflation.

Other concerns include supply chain disruptions, business interruptions, and worker injuries, with 62% citing supply chain disruption as a major risk concern, while 59% of respondents said they were worried about the potential for business interruption risks.

TARIFF CONCERNS

Notably, over 50% of respondents identified tariffs as a critical issue.

Due to tariffs, the report noted that the U.S. may adjust imports from various nations, affecting global trade flows and economic links. New tariffs on autos and parts, enacted in early 2025, impose a 25% tax, potentially raising retail auto prices significantly.

The cost of construction materials, which increased by 28.9% in 2021 and 12.6% in 2022, may now also rise once again because of tariffs on steel and lumber, the report noted.

“It's vital for business leaders to assess tariff trends and the corresponding economic implications in order to mitigate and manage risk,” the report stated.

Employee safety and retention also emerged as areas of concern for businesses, with 69% of respondents worried about finding and retaining talent. Another 62% said they were concerned about worker injuries. Additionally, 59% of respondents said that workers' compensation is one of their top insurance areas of focus.

The report noted that worker safety technology led by Al could provide a window into reducing many of these potential risks.

“Experienced risk engineering teams specialising in technologies such as imagery, telematics and wearables can help companies adjust training, improve equipment usage and update protocols to help prevent incidents,” the report said.

AI WORRIES REMAIN

However, the survey also found that concerns remain about the risks associated with Al. While some leaders are optimistic about Al's potential, others continue to be cautious about its impact on their business.

The Hartford highlighted that companies can view this uncertainty as an opportunity to enhance their risk management strategies.

Natural disasters and extreme weather are also primary concerns for 44% and 37% of businesses, respectively. Of those that took part in the study, 59% reported being increasingly concerned about business interruptions due to weather.

Continual disaster planning is crucial to minimise business disruptions and prevent closures, according to The Hartford.

“With most U.S. geographies now exposed to some degree of catastrophic weather, businesses will need to shift from response to resilience planning. Insurers with a mitigation-first mindset and deep expertise in catastrophe perils, data and risk engineering strategies can help,” the report stated.

The report also highlighted the rise of reshoring among North American multinational companies, sparked by the recent acceleration of U.S. tariffs.

Of the business leaders surveyed in 2025 by The Hartford, 39% are planning to exit or reduce their overseas operations. Regulatory concerns were cited as the primary reason for reshoring, ranking above potential duties.

According to The Hartford, reshoring production back to the U.S. demands substantial reinvestment. New risks may arise, including higher labor and infrastructure costs, the need for updated tax and regulatory strategies, and ongoing threats to supply chain resiliency regardless of location.

Despite these challenges, the report noted that business leaders are increasingly seeking more control over their operations in the face of geopolitical, supply chain, climate, and trade turbulence, which could impact operating costs.