Risk Management, Insurance and High Technology Small Firms

David Deakins, Andrew Paddison, Patrick Bentley

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Risk management consists of a process that involves the assessment and evaluation of risks. Identifying risks that can be reduced and risks that can be transferred (through insurance) is part of that process. The environment for insurance affects the ability of the high technology‐based entrepreneur to engage in this process. For example, the availability of product liability cover can affect the ability to develop new products. In a combined study of Scottish and West Midlands high technology‐based small firms (HTSFs), follow‐up interviews, cases and research in the insurance industry, we found that this environment is less than perfect. There are issues in the insurance industry that can lead to problems for high technology‐based entrepreneurs. These issues are associated with the availability and search costs associated with specialized insurance. Failure rates of high technology‐based entrepreneurs, although below those of other small firms, are still high. The high cost and limited availability of specialized insurance, which is sought by the high technology entrepreneur, contributes to the difficulty of the environment and adds to the costs and/or risks faced by such entrepreneurs.
Original languageEnglish
Pages (from-to)21-31
Number of pages10
JournalSmall Business and Enterprise Development
Volume4
Issue number1
DOIs
Publication statusPublished - 31 Dec 1997

Keywords

  • risk management
  • insurance
  • small firms
  • evaluation of risks
  • high technology‐based small firms

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