Small businesses fail to plan for the unexpected
Campaign launched to encourage SMEs to ensure their businesses and employees are protected in the event of an emergency
New independent research, commissioned by the British Insurance Brokers’ Association (BIBA), has revealed that millions of small and medium sized enterprises (SMEs) across the UK are failing to protect themselves and their employees in the event of emergencies such as fire, flood or an act of terrorism.
As a result, BIBA has launched a high profile campaign to encourage SMEs to get serious about business continuity, the practice of ensuring that businesses are protected in the event of an emergency. The campaign is being backed by politicians from all parties.
Government figures suggest nearly one in five businesses suffers a major disruption every year. Further research suggests 80% of businesses affected by a major incident close down within 18 months, and 90% of those who lose their data are forced to close down within two years.
Small enterprises in particular suffer severe financial loss if closures prevent or restrict trading over a period of weeks or even months. In research conducted by Populus, figures show that alarming numbers of SMEs are not prepared to deal with sudden crises that jeopardise their business.
With approximately 4.3 million SMEs in the UK, employing around 12 million people, this sector is vital to the UK economy. Effective planning to deal with unexpected events makes good business sense – it ensures that a business is protected and can continue its essential operations in the aftermath of an emergency.
Commenting on the campaign and the new research, Eric Galbraith, Chief Executive of the British Insurance Brokers’ Association said:
“Our research reveals an incredibly worrying trend amongst the essential small business sector in the UK. Too many businesses are putting themselves and their employees’ futures at risk by failing to put in place proper continuity plans should the unexpected happen.
“Every business needs to be properly prepared for a worst case scenario. Small businesses are vital to the UK economy and we simply cannot afford for them to be complacent. I urge every business to urgently speak to their broker to ensure they are properly covered.”
Mike Penning MP, Member of Parliament for Hemel Hempstead who has been supporting constituents impacted as a result of the Buncefield oil depot fire in December 2005, has been a leading campaigner on the issue. This week he tabled an Early Day Motion supporting the campaign in Parliament. He commented:
“I strongly urge every business to double check that they have an adequate business continuity plan in place. There is a real threat that your business, and your employees’ jobs will be lost if you do not prepare for the unexpected.
“Buncefield was a prime example of something that no one expected causing heartache to thousands. I do not want to see anyone experience the lows that my constituents did in 2005 and urge all businesses to get serious about business continuity.”
Commenting on the importance of having a continuity plan in place, David Croucher, Home Affairs Chairman at the FSB said:
“Small businesses are particularly at risk from the impact of an unexpected event such as a flood or act of terrorism. It is not just the initial impact that does the damage, it is the period elapsed until the business gets back up and running again. A long period out of action can spell the end for many small businesses. As a result, the Federation of Small Businesses urges all firms to plan for the unexpected and to put in place proper continuity plans to protect their business and employees.”
Director of Civil Contingencies Secretariat, Bruce Mann recommends that all organisations have in place robust, flexible business continuity management arrangements. He said:
"From the Carlisle floods to the London bombings and the Buncefield explosion, incidents have shown clearly the vast range of impacts emergencies can have on organisations across all sectors, affecting profits and operations. This is bad for employees, shareholders, customers and communities.
“Good Business Continuity Management will ensure that the impact of any emergency on business will be minimised, and should help business recover quickly.”
Welcoming the campaign Patrick Mercer MP, Shadow Security Minister said:
“This research shows us that too many businesses have no contingency plans for disasters. The SME sector is vital to the UK economy, and it is essential that it takes every step possible to ensure that it is protected against the worst case scenario.
Events in recent years including the Carlisle floods, the Buncefield explosion and even the tornadoes in London have shown just how suddenly businesses can be hit.
I urge all SMEs to get real about business continuity planning now, and ensure that they are in a position to survive should the worst happen.”
Coversure Insurance Services are members of the British Insurance Brokers Association – www.biba.org.uk, this news article is reproduced here with their kind permission.
