Small firms are underestimating how much it would cost them if their business was disrupted by a major incident, new research has found.
One in three businesses believe there will be no cost to them if they are disrupted by a disaster like a flood or a fire, and one in ten said it 'might' cost them up to £5,000, said the research by BT Business.
But the estimates are 'way off the mark', said the group, with the actual cost of disaster running to between £8,000 and £17,000.
Even headline-grabbing events like last summer's floods, the fire in Camden Town and the explosion at the Buncefield oil depot failed to make an impact, with just 4% of businesses saying these events made them consider their business continuity plans more carefully.
Bill Murphy, the group's managing director, said it's an issue many small companies don't address until disaster strikes.
"By then it's too late and they're picking up the pieces," he said.
"It's clear they seriously misjudge the potential financial impact on their business of a major incident. While they recognise the importance of planning to combat operational downtime, when their business and communications might be out of action, they need to make it a much higher priority. If they don't, they are putting their business at risk."
Nick Starling, director of general insurance and health at the Association of British Insurers, added that last summer’s floods highlighted the importance of contingency planning.
"Insurers handled thousands of claims from firms whose livelihoods were put at risk by the floods. It is essential for all businesses to have adequate insurance cover, and a thorough business contingency plan in place, so that if the worst happens they can get back on their feet as quickly as possible."
