Small businesses 'are not prepared' for unexpected disasters
SMEs are not taking enough precautions to protect their businesses and staff from unexpected events, a new report reveals.
Research commissioned by the British Insurance Brokers' Association (Biba) found that several million SMEs across the UK were still failing to take any action to project their business from potential disasters, such as fires, floods or terrorism.
Only a quarter of SMEs had any plans in place to deal with a terrorist attack and half had no continuity plans to deal with a flood. Just over half had an arrangement for dealing with fire.
Eric Galbraith, the chief executive of the Biba, said that the figures showed a worrying lack of planning on the part of SMEs.
"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," he said.
"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."
As well as assessing the physical risks to their businesses, SMEs have been urged by the Financial Service Authority (FSA) to test their ability to deal with financial shocks. The advice came after the FSA's Financial Risk Outlook (FRO) document highlighted potential market trouble in the coming year.
"I would encourage all firms to consider the risks outlined in the FRO and to plan accordingly. Stress testing and scenario analysis enable firms to assess and mitigate the risks that face them," said FSA chairman Callum McCarthy.
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