February 2006

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Small businesses in Britain fail to plan for the unthinkable

Small businesses in Britain fail to plan for the unthinkable
- 65% of British small businesses do not have a formal Business Continuity Plan
- 43% of British small businesses are not insured should their existence be threatened by external events
- Almost 60% of British small businesses believe that a closure of one day would have some impact on the business

Research* commissioned by small business insurer, MORE TH>N, has revealed that the majority of small businesses** interviewed are unprepared to cope in the event of a major incident occurring.

In recent years, British businesses have faced a number of external events that threatened their existence, such as foot and mouth disease, adverse weather conditions, petrol shortages, industrial disputes and terrorist activity. British small businesses were asked whether or not they were prepared in the event of having to close their business for 24 hours or more.

Results showed that 65% of British small businesses lack a formal Business Continuity Plan*** to get the business up and running again. Worryingly, the research showed that small businesses are less likely than those with a higher turnover to be insured for such events. 43% of small businesses do not have business interruption cover and would have to bear the brunt of any costs associated with closure themselves, compared to a figure of 35% for all British businesses

Worst case scenario?
Small businesses were also asked what they considered to be the greatest external threat
to their business. Fire was seen as the biggest threat by about a third of small businesses, followed by a telecommunications failure and a power failure.

Commenting on the findings, Rachel Cotton, Manager for MORE TH>N Business, said: “With almost 60% of small businesses believing that a closure of just one day would have some impact on their business, our research highlights the need for these businesses to do more to prepare against the threat posed by external events.

“Many business owners may believe that they are well placed to deal with a major incident.
However, the research shows that a majority lack the framework to ensure that normal business can continue at the earliest possible opportunity and with the least
possible disruption to the business itself. Ensuring that your business has a viable continuity plan in place and suitable cover for business interruption is vital.”

For further information on small business insurance from MORE TH>N call 0800 072 0077 or log onto www.morethanbusiness.com.
ends
Media enquiries:

Alison McCulloch
MORE TH>N Business
Tel: 020 7337 5619
Email: alison.mcculloch@uk.royalsun.com

Notes to Editors:

Research
*Royal & SunAlliance commissioned research agency Critical to conduct a survey to discover how British businesses handle external risks to their business such as fire, flood and terrorism, and to investigate whether or not they are prepared for these events. A total of 1,000 businesses across Britain were interviewed between 10-21 October 2005. Of these, 253 were defined as small businesses with an annual turnover of up to £1 million, and the results in this report referring to small businesses were based on these 253.

** Businesses with an annual turnover of up to £1 million.

***A Business Continuity Plan is a plan that systematically identifies the potential impacts of an event that may threaten the company and provides a framework for getting back to ‘business as usual’ as quickly as possible.

Business Interruption Cover
Business Interruption is designed to cover the risk of financial loss as a result of damage caused by fire and other insured perils, at the property or elsewhere. Business Interruption will cover standard eventualities such as loss of gross profit and additional cost of working. It can also be extended to cater for more specific requirements, for example, denial of access and failure of public utilities.

A typical MORE TH>N Business shop or office policy includes:
- Business Interruption cover (choose from loss of profits or additional cost of working)
- Cover for your property (buildings and contents)
- Employers’ liability (£10 million limit of indemnity)
- Public Liability (£2 million limit with option to increase)
- Money cover to various limits
- Small business risk consultants
- 24 Hr claims helpline
- Access to free guidance on heath & safety, tax, PAYE and stress counselling
- Discounts for risks with good claims histories and if your property is protected by local authority CCTV
- Option to pay by interest free instalments

MORE TH>N is the direct financial services arm of Royal & Sun Alliance. It offers motor, home, pet, travel and life insurance as well as a credit card via the internet and by phone. It also offers small business, van, shop, office, business car, property, clubs, Hotels and contractors insurance.

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