Helping firms keep their heads above water

28 April 2008

The Government has asked the Association of British Insurers (ABI) to raise the level of contingency planning among the 4.3 million small to medium-sized businesses in the UK.

As many as seven out of 10 small firms would go out of business if they experienced a major emergency in their first year, yet over two-thirds have no contingency plans to deal with an emergency, such as a major flood or fire.

Stephen Haddrill, the ABI’s Director General, said: "Small to medium-sized firms are particularly vulnerable to the unexpected event that could bring them down."

During last summer’s floods, insurers dealt with over 27,000 claims from flooded firms and paid out £1 billion to them. During that time it became clear to the ABI that many firms had inadequate or no plans in place to help them survive a major incident.

"I urge all firms to plan for the unexpected," Mr Haddrill said. "Doing so will make the difference between survival and going under should the worst happen."

Pat McFadden, Minister of State for the Department for Business, praised the ABI’s new "Insurance for Small Businesses" guide. He said that it provided vital risk management advice to help small businesses grow and flourish.

It is available at www.abi.org.uk/SMEGUIDE.