U.K. small businesses lacking business interruption coverage, despite experiencing losses
22 Oct 2014
Small and medium-sized businesses in the United Kingdom may be leaving themselves vulnerable to business interruption losses, based on a survey commissioned by insurer Aviva.
Based on the poll of 1,500 small and medium business owners and decision makers in Great Britain in June, 62% of businesses do not have business interruption coverage or aren’t sure if their current policy covers interruption to normal business activities.
That percentage equates to 2.9 million businesses, based on Aviva’s survey results against the number of small and medium businesses (4.9 million) as per government statistics.
Despite the lack of coverage, 21% of businesses surveyed said they had experienced disruption to their businesses. For a quarter of those, it took up to three months to get back to normal business, while it took up to and beyond two years.
Among those who did not have full coverage, 42% said they had to borrow money from friends or family, take out bank loans or use their own savings to help with their business recovery.
“(Businesses) should also consider creating a business continuity plan,” Robert Ledger, head of small business at Aviva noted in a statement on the survey results.
“It is quite straight forward - for a lot of small businesses it could be done in the time it takes to have coffee and a sandwich, and will play a vital role in helping you understand and manage any risk to your business operations, as well as helping assess the level of business interruption insurance you may need.
“In addition, more and more businesses now want to see the business continuity plans of their suppliers to understand the impact of any event on their own service levels so having a business continuity plan can also be useful in your contract negotiations.”