New research from the British Insurance Brokers’ Association (BIBA) and the Cabinet Office has revealed that the business continuity plans are likely to stop businesses from failing after a major disruption such as a flood or fire.
The majority (96%) of respondents with sufficient information on business continuity felt that having a business continuity plan in place would keep businesses trading or reduce the costs they would incur when they would have otherwise likely failed, or it seemed to reduce the cost of the disruption significantly. In addition to keeping businesses running, 62% of respondents said that those with plans benefited from premium discounts, reduced excesses and doors opening to new insurance markets.
Insurers supported this too, with 83% of those asked, saying that they would provide a discount or improved insurance terms to a business interruption policy if a business continuity plan was in place.
The survey showed 74% of all emergencies against businesses were water or fire related. With flood and escape of water (41%) and fire (33%). Small businesses appear to be most at risk from the effects of a major disruption, with only 5% of respondents believing that small and micro businesses have plans in place.
Francis Maude, Minister for Cabinet Office, said: “This survey has underlined the need for simple guidance on business continuity aimed at smaller firms. This echoes the commitment made by the Government in the Strategic Defence and Security Review to provide support to SMEs by improving their business continuity.”
Graeme Trudgill, BIBA Head of Corporate Affairs, said: ”The results are quite striking with small businesses potentially very vulnerable and we look forward to taking these findings from senior executives within the insurance industry forward with the Cabinet Office. Our joint aim is to produce guidance to businesses, especially small businesses to help them to understand the importance and significant benefits of business continuity plans”.
The survey was conducted with BIBA and the Cabinet Office among BIBA members and Insurer partners, aiming to better understand the benefits that having resilience measures in place offer. The research can be viewed here.
