Seven out of 10 small companies would go out of business if they experienced a major emergency in their first year of trading, research has shown.
As a result, the Association of British Insurers (ABI) and the British government have launched a campaign to increase contingency planning among the UK’s 4.3 million small to medium sized businesses.
The ABI says that the slack approach to contingency planning was highlighted by the floods last year when insurers received over 27,000 claims from firms affected by the deluge and paid out £1bn as a result.
Stephen Haddrill, the ABI’s director general said that it is crucial companies plan for the unexpected, and “doing so will make the difference between survival and going under should the worst happen”.
Pat McFadden, minister of state for the department of business said that the consequences of small firms being hit by a similar incident as the inundations seen last year could have disastrous consequences for the wider British economy.
“The millions of people who launch, lead and work for small businesses up and down the country create vital jobs, provide essential services and generate significant wealth for the country,” said McFadden.
“This latest guidance provides vital risk management advice to help ensure our small businesses grow and flourish,” he continued.
© Crimson Business Ltd. 2008