NEWS RELEASE

I issued the following press release on 2.02.2007

LYNNE JONES MP URGES SMALL BUSINESSES TO PLAN FOR THE UNEXPECTED

Local MP Lynne Jones has urged small businesses in the region to ensure they can survive in the event of an emergency.

The calls follow new independent research, commissioned by the British Insurance Brokers’ Association (BIBA), which reveals that millions of small and medium sized enterprises (SMEs) across the UK are failing to protect themselves and their employees in the event of emergencies such as fire, flood or an act of terrorism.

Lynne Jones has joined politicians from across the political divide, who are supporting a high profile campaign, launched by BIBA, to encourage SMEs to get serious about business continuity, the practice of ensuring that businesses are protected in the event of an emergency. The campaign is also being backed by the Federation of Small Business (FSB).

Government figures suggest nearly one in five businesses suffers a major disruption every year. Further research suggests 80% of businesses affected by a major incident close down within 18 months, and 90% of those who lose their data are forced to close down within two years.

Small enterprises in particular suffer severe financial loss if closures prevent or restrict trading over a period of weeks or even months. In research conducted by Populus, figures show that alarming numbers of SMEs are not prepared to deal with sudden crises that jeopardise their business.

Commenting on the figures Dr Jones said:

“The SME sector is absolutely vital to the local economy, and it is imperative that small enterprises take every possible step to ensure that both their business, and their employees are protected from the unexpected.

In many ways, I operate as a small business myself and my staff ensure that we make regular backups of computer data and store them away from the office.

I urge small businesses to take every possible step to safeguard their businesses, and ensure that should the worst happen they will be able to ride out the storm and begin trading again.”

Commenting on the campaign and the new research, Eric Galbraith, Chief Executive of the British Insurance Brokers’ Association said:

“Our research reveals an incredibly worrying trend amongst the essential small business sector in the UK. Too many businesses are putting themselves and their employees’ futures at risk by failing put in place proper continuity plans should the unexpected happen.

“Every business needs to be properly prepared for a worst case scenario. 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.”

Mike Penning MP, Member of Parliament for Hemel Hempstead who has been supporting constituents impacted as a result of the Buncefield oil depot fire in December 2005, has been a leading campaigner on the issue. This week he tabled an Early Day Motion supporting the campaign in Parliament. He commented:

“I strongly urge every business to double check that they have an adequate business continuity plan in place. There is a real threat that your business, and your employees’ jobs will be lost if you do not prepare for the unexpected.

“Buncefield was a prime example of something that no one expected causing heartache to thousands. I do not want to see anyone experience the lows that my constituents did in 2005 and urge all businesses to get serious about business continuity.”

Commenting on the importance of having a continuity plan in place, David Croucher, Home Affairs Chairman at the FSB said:

“Small businesses are particularly at risk from the impact of an unexpected event such as a flood or act of terrorism. It is not just the initial impact that does the damage, it is the period elapsed until the business gets back up and running again. A long period out of action can spell the end for many small businesses. As a result, the Federation of Small Businesses urges all firms to plan for the unexpected and to put in place proper continuity plans to protect their business and employees.”

Director of Civil Contingencies Secretariat, Bruce Mann recommends that all organisations have in place robust, flexible business continuity management arrangements. He said:

"From the Carlisle floods to the London bombings and the Buncefield explosion, recent incidents have shown clearly the vast range of impacts emergencies can have on organisations across all sectors, affecting profits and operations.  This is bad for employees, shareholders, customers and communities.

"Good Business Continuity Management will ensure that the impact of any emergency on business will be minimised, and should help business recover quickly."

Notes to editors:

Populus surveyed the opinions of 250 directors by telephone between 30th October and 7th November 2006, 60% of whom were Managing Directors, 20% Financial Directors and 20%Senior Directors. 73% worked in companies with less than 50 employees, 14% in companies with 50-99 employees and 13% for companies with between 100 and 250 employees.

The findings of the research, completed by Populus, reveal that:

Nearly three quarters of businesses had no plans for dealing with the resulting impact of acts of terrorism.

Nearly half of businesses had no plans to deal with the impact of flooding.

A third of businesses had no plans to deal with the impact of a storm, while nearly a third only had “rough plans”.

Only just over a half had plans to deal with the effects that a fire might have on their business.

Only half had a formal written Business Continuity plan in place.

Half of those questioned believed it would take less than a day for a serious disruption or disaster to have a significant impact on their business.

The Buncefield oil depot fire of December 2005, for example, left many small businesses facing ruin. This was not due to the immediate loss of goods and premises, for which they receive insurance payments, but because their inability to resume business has led to trading losses way beyond the initial event itself.

Mike Penning MP for Hemel Hempstead has tabled an EDM in support of the campaign which can be accessed online here:

http://edmi.parliament.uk/EDMi/EDMDetails.aspx?EDMID=32442&SESSION=885

Businesses can avoid the long-term fall out of an emergency situation by  putting in place a robust Business Continuity Plan linked with Business Interruption cover, readily available in the market through insurance brokers.    Following an insured loss at the premises it provides:

Protection for reduction in turnover

Cover for additional expenditure such as temporary storage costs or additional transport costs to enable the business to recover as quickly as possible

To ensure small businesses are properly prepared, brokers take the following steps to source and advise on the most appropriate cover.

Identify the potential impact of a major loss on the business

Establish how long it would take to recover

Establish how major destruction or damage at a customer’s or supplier’s premises might affect the business

Establish how destruction or damage at the premises of a public utilities supplier (gas, water, electricity, telecommunications, internet service provider) might affect the business

Assess how refused access to the premises following a loss in the immediate vicinity might impact upon trade

In addition, an insurance broker will advise on the development of a Business Continuity Plan to enable the business to survive a major disaster.

For more information, or to make an interview request, please contact the business resilience campaign press office:

Leighann Burtrand: 020 7397 0223 or burtrandl@biba.org.uk

Ben Thornton: 020 7395 7179 or thorntob@fleishmaneurope.com

Sophie Pim: 020 7395 7151 or sophie.pim@fleishmaneurope.com

Small businesses concerned about their present cover should visit BIBA’s website: www.biba.org.uk