Seven in ten SMEs have been hit by bad weather
As the tail end of Storm Jonas is followed closely by Storm Gertrude, more UK businesses are braced for disruption. Rain, high winds and flooding have all hit the headlines in recent weeks but despite the effects they can have on small businesses, many remain under-insured.
According to specialist insurer Towergate, 69% of SMEs across the country have been adversely affected, losing revenue due to bad weather. This rises to a high of 78% in Wales, followed by 75% in London, 74% in the Northwest and 70% of all small businesses in Scotland. The least affected areas are the East and Southeast but even there the majority of businesses have lost revenue due to the weather (61% and 64% respectively).
More than a third of businesses had experienced property damage caused by the weather while a quarter said that staff being unable to travel to work had caused a loss of earnings. A similar proportion cited a reduced demand for their goods or services during or following bad weather and 19% said the weather had prevented work from taking place.
Despite the prevalence of bad weather disruption, more than a third (37%) had no contingency plans in place and lost an average of two working days a year as a result. Even more worryingly, 60% of SMEs around the country are under-insured against the elements, with only a quarter taking out insurance against weather damage specifically.
The average business claim for weather-related property damage was £74,000. An SME having to meet some or all of this cost itself due to being under-insured or not insured at all could find itself in serious trouble and in need of business turnaround or the advice of an insolvency practitioner.
Henderson Insurance Brokers, meanwhile, warned that old or out of date flood data could see insurers inflating premiums unnecessarily. They said it was vital for the data compiled by the Environment Agency and insurance companies, who often have their own programmes and criteria to assess flood risk, is regularly scrutinised to ensure it is up-to-date and accurate.
By Phil Smith