New research shows British businesses fail to plan for the 'unthinkable'

Far too many organisations are still failing to plan

Research commissioned by Royal & SunAlliance (R&SA), the UK's second largest commercial insurer, has revealed that British businesses are ill-equipped and unprepared to cope in the event of a major incident occurring.

Despite repeated warning of the impact of not planning properly the survey found 59% of British businesses do not have a formal Business Continuity Plan. Only 14% of British businesses have reviewed their contingency plans in the light of last year's terrorist activity and 35% of British businesses are not insured should their existence be threatened by external events.

In recent years, British businesses have faced a number of external events that threatened their existence, such as foot and mouth disease, adverse weather conditions, petrol shortages, industrial disputes and terrorist activity.

British businesses were asked whether or not they were prepared in the event of having to close their business for 24 hours or more. The results showed that 59% of British businesses lack a formal Business Continuity Plan** to get the business up and running again.

There are some wide regional variations within this, with over two thirds (67%) of businesses in London prepared, compared with only 48% in Wales and 39% in the South East. Encouragingly, however, 94% of British businesses have some kind of informal contingency plans.

Regionally, the area with the highest number of unprepared businesses was Scotland, where 21% of businesses claim to have absolutely no contingency plans in place. Additionally, the research showed that 35% of British businesses are not insured for such events and would have to bear the brunt of any costs associated with closure themselves. And this despite the fact that business interruption cover is an easily, and for most customers, reasonably priced addition to most commercial property policies.

The 7 July effect For some businesses, recent terrorist activity in the UK (and London in particular) has forced businesses to review the arrangements they have in place. The research found that one in seven British businesses have reviewed their contingency plans following recent events.

Businesses in London are most likely to have reviewed their plans, with one in three businesses doing so because of the threat of terrorism. Following the events of July 2005, businesses based in London were twice as likely as the national average to believe that the bombings have increased the likelihood of their business facing an incident that could close them down for over 24 hours. 16% of London businesses consider terrorism to be the greatest potential threat to their business. This compares to a national average of 5%. Worst case scenario? Businesses were also asked what they considered to be the greatest external threat to their business.

Nationally, fire was seen as the biggest threat by three out of ten businesses. Regionally however, in Scotland an IT systems failure was considered to be the biggest threat, by 22% compared to a national figure of 11%.

Commenting on the findings, Graham Heale, underwriting director at R&SA, said: "With two thirds (63%) of British businesses believing that a closure of just one day would have some impact on their business, our research highlights the need for these businesses to do more to prepare against the threat posed by external events. "Many business owners may believe that they are well placed to deal with a major incident. However, the research shows that a majority lack the framework to ensure that normal business can continue at the earliest possible opportunity and with the least possible disruption to the business itself. Ensuring that your business has a viable continuity plan in place is vital."

Businesses looking for help and guidance on how to cope in the event of a major incident can contact R&SA directly for a copy of Foresight, their CD-ROM based business continuity planning guide. 

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