Over half of UK businesses are putting their futures in jeopardy by failing to make adequate disaster contingency plans, new research has revealed.

The study, conducted by the Chartered Management Institute (CMI), found that just 47 per cent of firms had a continuity process to follow if disaster struck, with the remainder showing a “dangerously cavalier” attitude towards disruption, according to the CMI.

Despite repeated threats such as terrorism and computer viruses such as MyDoom, just 57 per cent of companies with contingency plans tested their procedures annually or more frequently.

Worryingly, one in ten respondents admitted that they had not made changes to their plans, despite discovering shortcomings as a result of testing.

Small businesses are particularly vulnerable to disasters, with research showing that the most small firms do not survive major incidents such as total data loss or fire.

Although most respondents to the CMI survey recognised that they were potentially at risk of folding because of disaster, just 28 per cent said they could cover lost skills, 37 per cent could make up for departed staff and only 24 per cent could deal with the negative publicity after failing to provide a normal service.

Christine Hayhurst, of the CMI, said that many organisations are playing Russian Roulette with their greatest assets – their staff and their reputation.

“At best, failure to provide contingency plans for loss of people or individuals with specific skills can lead to unnecessary pressures in the workplace.

“At worst, it could close businesses and ruin reputations,” she said.

John Sharp, chief executive of the Business Continuity Institute, said that the survey was very concerning.

“This is the fifth year that the study has been carried out and we are very concerned that many UK organisations continue to bury their heads in the sand.

“Business continuity management helps to prevent and prepare for disruption to normal business operations, and can save and its employees if disaster strikes.

“Without it, organisations can suffer enormous, sometimes terminal, damage. If nothing else, we are urgently calling upon UK businesses to do two things – develop a business continuity plan for their organisation and test it at least once a year.

“Not to do so is playing with fire,” he said.