This week’s story that businesses underestimate how much it would cost them if their business were to be disrupted by a ‘major incident’ hit a nerve at the startups office.
It hit a nerve because firstly, we spent a great deal of last summer talking to small businesses who had underestimated how much it would cost them if their business were to be disrupted by a ‘major incident’, and consequently, had ended up much worse off after the floods.
Secondly, because it specifically mentioned the explosion at the Buncefield oil depot, which was right next to my dad’s office – or at least, it was right next to his office until the explosion, after which the office wasn’t there at all.
According to the research, a third of small companies believe there would be ‘no cost’ to their business if, for example, their office was razed to the ground by an unexpected explosion at a nearby oil refinery, and one in ten estimate the cost at just £5,000.
It has to be said, my dad was in a similar position at the time. As the CEO of a just-started start-up, he admitted, sheepishly, that he wasn’t ‘fully’ insured, and didn’t really expect to have to be.
“It was difficult to take the risk seriously,” he lamented. “But it’s a lot more serious than you realise.”
“At the time, we were fire-fighting in a number of different areas. We were only about 50% insured, so after the explosion, it was one hell of a job to get back up and running.”
In fact, his company have only just moved into new premises, after one of their clients gave them temporary accommodation for a couple of years.
Because he’s a dad, and because dads are full of good advice, I asked him what other small businesses should do. “I guess the lesson is that you don’t really know what’s going to happen,” he said.
“Really, you just need to force yourself to spend a day a year concentrating on your insurance. Set a day in your diary and then spend the whole of that day sorting it out.”
