Firms must plan to cope with major incidents

Feb 9 2010 by Karen Dent, The Journal

SMALL businesses need to do more to ensure their survival if they are faced with a major incident such as fire, flood or even terrorism.

Around 45% of small firms have no more than a rough idea of how they would cope with flood or storm damage, which cost £3bn in insurance claims during 2007. Statistics show that eight out of 10 businesses hit by a major incident close down within 18 months.

The research, by the British Insurance Brokers’ Association (BIBA), also found that the number of small firms that claim it would take more than six months for their business to recover from a major incident has nearly trebled.

It wants government support to ensure that small businesses survive major incidents and says small firms should ensure they have adequate plans in place to deal with unexpected problems.

Steve Foulsham, BIBA technical services manager, said: “There have been slight improvements since our previous research in 2006 but we still have concerns that businesses are still not adequately protected.

“Every business needs to be properly prepared for a major incident. It is vital to raise and maintain awareness of the need for businesses to prepare for the potential impacts of a natural disaster or terrorist attack.

“The Buncefield oil depot fire, 7/7 bombings and continued incidents of flooding illustrate the need for all to plan for the unexpected.”

BIBA wants the Government to ensure that all businesses have continuity plans in place, covering issues such as how to replace equipment and stock, what to do if their computer and telephone systems went down for three days and how to cope in the immediate aftermath of a disaster.

The research comes as the Environment Agency announced that half a million businesses and homes at risk of flooding will be added to its flood alert phone system, more than doubling the number already on the scheme’s books. Until now, businesses and homes have had to opt into the warning system, but they will now be added automatically.

Environment Agency chairman, Lord Chris Smith, said: “One in six homes in England and Wales are at risk of flooding.

“By automatically signing up an extra 500,000 homes and businesses, we will more than double the number on our system to almost one million, giving more people vital time to get prepared for flooding, and, by doing so, protecting lives and property.”

The Floodline Warnings Direct service provides flood warnings to homes at risk of sea or river flooding by telephone, mobile, email, text message, fax or pager.