Scots SMEs unprepared for Storm Doris and putting property at risk

SMEs left exposed to the elements, insurer’s research reveals

Research from a specialist insurance broker has revealed that many of the country’s micro, small and medium-sized enterprises (SMEs) are ill-prepared for the effects of bad weather and that 55% of Scottish SMEs lack suitable insurance.
Towergate says with 66% of SMEs reporting lost revenue due to bad weather and almost a third (31%) having suffered weather-related damage to property over the last five years, it’s surprising to find that nearly half (44%) have no business continuity plan in place to ensure they can continue trading, while over two thirds (69%) do not have any insurance cover to protect them.
Its nationwide research found SMEs were being hit hardest by employees being delayed or prevented from reaching work (24%). Reduced demand for goods and services (16%) and distruption to their supply chain (15%) were also common problems caused by bad weather.
Overall, SMEs reported an average of 14.7 hours lost a year due to the weather. However, some sectors lost much more; with engineering and building (20.8 hours), manufacturing and utilities (19.6 hours), and unsurprisingly transport (19.7 hours) losing around half a week every year to the effects of bad weather.
According to the Department for Business, Energy & Industrial Strategy* there are nearly 5.5 million SMEs in the UK, employing 15.7 million people and turning over £1.8 trillion. With 69% of SME’s lacking any insurance cover for bad weather, nearly 3.8 million businesses are exposed to the elements.
Towergate’s research found, on average, SME’s estimated £523,934 of property and related assets could be at risk of damage by adverse weather – meaning over £1.9 trillion of UK SME’s property and assets could be unprotected.
Topping the list for lost revenue is Yorkshire (79% of SMEs) and Scotland (74%) – two regions which often suffer periods of bad weather including flooding, high winds and heavy snow fall. Meanwhile, Wales and the South West are two of the most resilient regions, with the fewest SMEs reporting lost revenue due to bad weather. Nevertheless, well over half of small and medium sized businesses in these regions have still lost revenue.
Despite the majority of SMEs losing revenue due to the weather, a worrying high number remain uninsured. With the national average at 69%, the North East is the most uninsured region with 82% of SMEs saying they have no cover for the effects of bad weather.
% of SMEs with lost revenue
due to bad weather
% SMEs without insurance
for bad weather
North West
UK Average
South East
North East
South West
Northern Ireland
Joe Thelwell of Towergate said: “The UK’s economy depends on small and medium sized businesses. But far too many firms have left themselves exposed to the unpredictable and at times damaging British weather. The majority of SMEs do not have appropriate contingency plans or insurance to protect them against lost business and unexpected bills resulting from the havoc our weather can wreak.
“With millions of people’s livelihoods depending on SMEs, it is crucial that these businesses take steps to better prepare for bad weather so they can get up and running as soon as possible. Practically, that could include backing-up computer systems and records, identifying contingency premises or taking out specific policies.”
Towergate’s recommendations to keep SMEs trading through the bad weather:
  • Have a list of emergency contacts such as roofers and plumbers easily accessible.
  • Ensure you have contact details for the landlord or managing agent, and your insurance provider.
  • Put in place an emergency contact process for employees and ensure they are familiar with the processes and scenarios in which they should be used.
  • Identify potential alternative premises or business locations to temporarily relocate if necessary.
  • Always back-up computer records and store copies off site.
  • Ensure any important paper documents are stored in a fire and water-proof cabinet, that copies are kept off-site and consider creating digital copies.
  • If the premises are unoccupied or become unoccupied you should notify your broker or insurance company, and utility supplies should be turned off at the mains.
  • Insulate all water pipes and tanks in the building which could be liable to freezing.
  • Locate your main stop cock where the water enters the property – make sure all staff know where and how to stop the water in the event of an emergency.
  • Make sure someone regularly inspects the building, knows where utility supplies can be turned off and who to contact in the event of an emergency.
  • Where possible leave the heating system on, if not possible turn water off at the mains and drain the pipes and tanks.

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