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The threat of critical equipment failure is a major concern for 94 percent of Fortune 500-size companies. That’s according to a new survey of 200 business leaders with company-wide responsibility for overseeing equipment operations or equipment risk. The survey was commissioned by FM Global. All respondents were from companies with more than US$1 billion in revenue, and three-quarters were from companies with over US$5 billion.

Equipment failure risks have increased over the past five years in the judgment of 43 percent of respondents, compared with only 29 percent who said those risks have decreased in that time.

The stakes of equipment failure are high: 75 percent of respondents said they expect it would take months, at least, for their companies to recover financially from the failure of critical equipment, with 14 percent of them predicting recovery would take years.

Respondents expect a range of negative impacts in the event of a critical equipment failure:

  • 54 percent expect a decline in revenue/earnings;
  • 51 percent expect increased scrutiny from the investment community;
  • 50 percent expect the introduction of regulatory compliance problems;
  • 48 percent expect the degradation of brand/reputation;
  • 46 percent expect an inability to fulfill orders, leading to a decline in market share;
  • 39 percent expect a decline in share price;
  • 29 percent expect layoffs and/or loss of key employees.

The research was commissioned by FM Global and conducted by Engine Group.

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