This page contains a Flash digital edition of a book.
BIBA

Resilience is key

British Insurance Brokers’ Association [BIBA] Technical

Services Manager and Chartered Broker Steve Foulsham explains the need for planning ahead for small and medium-sized enterprises…

A

business may be ticking over. It may have survived the recession. But, far too many of the UK’s SMEs are living under a sense of false security because they have failed to plan how they would keep trading after a disaster.

Business resilience means being ready to cope with a major disruption. It is about having a tested business continuity plan in place, which provides the best possible chance of getting through the most arduous of circumstances. The summer 2007 floods, for example, may have resulted in some £3billion of claims, but the recent spate of wintry weather has also proved hugely damaging - snow and ice meant that millions of workers stayed at home. Yet, research commissioned by the British Insurance Brokers’ Association (BIBA) has shown almost half of SMEs (45 per cent) had no – or at best, sketchy – plans showing how they would cope with the effects of flood damage. While there is an immediate cost if a business suffers a loss, without due care to planning for a disaster, the results can be devastating. Government figures show that 80 per cent of businesses affected by a major incident close down within 18 months. Insurance cover for Property and Business Interruption will help but this is only part of the solution to ensure that the business survives.

Severe weather is one potential disaster. A pandemic could be another - it was just a few months ago that swine flu dominated the headlines. Staff absences in these circumstances are unlikely to be covered by insurance. Then there are out of the blue accidents - in 2005 the Buncefield explosions put hundreds of businesses out of action. Terrorism remains a further threat. No one knows what is round the corner. What is certain though is that customers will quickly switch loyalty if they think a company is vulnerable or has gone out of business. A typical misconception is that becoming a more resilient business is going to be expensive. This is certainly not the case. In fact, a lot is simple common sense.

12

If employees cannot make it into the workplace, then arrangements can often be made to allow them to work from home. There is plenty of help available in setting up remote IT access, along with telephone support. It makes sense as does having a list of all key customers who can be reassured a business is still trading. A business resilience plan should be formulated by the chief executive, but those with management responsibility should also contribute and all employees should know about the plan as well as be involved in its testing.

It must address those first hours after a disaster - which are critical - and also look at the longer term. For example, this could be if a specialist piece of replacement equipment needs to be brought in.

There is no one-size-fits-all for a business resilience plan - but it may well be that your insurance broker can help by providing guidance on what areas need covering, or would be able to source this elsewhere. A resilient business may also benefit from better insurance terms - but beyond this, planning to cope with a disaster is a core part of risk management.

BIBA is campaigning to ensure far more of

SMEs understand the importance of business resilience - and the UK will be all the better for it. Indeed, with approximately 4.3 million SMEs in the UK, employing around 12 million people, this sector is vital to the UK economy. BIBA urges the Government to do more to ensure there is a much higher survival rate for those businesses that are affected by a disaster, but effective planning from businesses now will also go a long way to ensure many more continue to thrive.

Formulating a strategy to stay in business

There are a number of important areas which should be included within an SME’s business resilience plan. What matters is taking time out to think through what are the make or break issues and then organising a test run to check the plan works. Remember that many brokers are able to provide expert advice or in the case of complex businesses, recommend a consultant.

Some of the areas which should be included are: • Having plans to replace machines, equipment and stock • Considering what would happen if the computer or telephone system were down for three days

• Organising how to cope in the first hour following a disaster

• Considering the effects on the business if a major supplier or customer suffered a disaster • Planning for continued operation of the business if half or more of staff were off sick.

Visit www.biba.org.uk to find details of a local BIBA broker who can help with business resilience.

SGB OUTDOOR MAY 2010 Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44
Produced with Yudu - www.yudu.com