What would happen to your business after a significant incident, such as a flood, fire or theft? How would you carry on trading? How would you keep in contact with your customers? Would your profit be affected?

These are questions faced by all SME businesses. According to insurance industry research, over half of SMEs affected by a significant incident cease trading within 18 months. So, what can you do to help minimise this risk?

Arranging correct insurance protection is vital; firstly to reinstate your damaged property and, secondly, to reimburse you for the additional costs incurred by your business to carry on trading as well as any associated loss in revenue (aka business interruption insurance). Selecting a good reputable insurance company here is all important. You need to make sure your insurance partner will support you quickly to minimise the impact on your business.

Whilst most SMEs insure against the main first party perils (fire, flood and the like), there are other areas for which protection can be sought. For example, the costs incurred by you to carry on trading following denial of access to your premises from, say, a fire to neighbouring premises or following police action at access roads. Furthermore, your business may suffer from loss of public supply of utilities, such as water, electricity or phone lines. Insurance protection can be purchased for these areas.

The length of your business interruption protection is key. In our experience, following a major loss at premises you can typically expect the building to be reinstated within 12-18 months, however, the impact on your business may carry on beyond that time whilst you move back into the premises, inform customers and resume trading output to pre-loss levels. You can select the length of business interruption protection provided by your insurance company to provide enhanced long term cover, which will provide further security to your business whilst you recover.

What else can you do to help recover from a significant incident? Plan ahead! Your response in the first 24 hours following a loss is key to business survival. We recommend you plan for such circumstances so that you can respond quickly. A business continuity plan is valuable here. This document will include practical response details; including where the management team will meet to discuss the next steps, essential telephone numbers of staff and key customers, a PR media strategy for informing the public of the situation and keeping your brand reputation intact.

The message from us is simple – to help with business survival plan, prepare and protect.

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