Small Businesses, Brace Yourselves

New research from Towergate Insurance on how bad weather affect business on SMEs reveals that:
- Three in five SMEs not insured against the elements, risking £74,000 property damage
- Over a third of SMEs don’t have business continuity plan for adverse weather
- Outside of the capital, Wales and North West top the list for small business losses

Bad weather conditions are hitting the revenues of over two thirds (69%) of small to medium sized businesses in the UK according to new research from specialist insurance broker, Towergate. This is an increase of almost a quarter compared to last year where nearly half (46%) of businesses were affected.

The research, conducted among 1,000 small to medium-sized businesses (SMEs) across the country, found that SME finances are being hit by bad weather – with staff unable to travel to work (25%), reduced demand for goods or services (24%) and poor weather conditions preventing work (19%) topping the factors for lost earnings. This is compounded by the fact that over a third (37%) of SMEs don’t have a business continuity plan, and as a result lose two working days each year on average due to weather chaos.

The nationwide findings also reveal that over the past five years, more than a third (37%) of small businesses have experienced property damage from bad weather. Yet three in five aren’t insured against flooding, high winds, thunder and lightning, snow, ice or hail – risking footing the bill for £74,000 worth of property damage on average. With an estimated 5.4 million SMEs in the UK, the total bill from weather damage could be as high as £240 billion.

Outside of London, Wales and the North West top the list for small business losses. Given these regions are often hit worst by adverse weather, such losses are likely to be the result of three fifths of SMEs in these regions being underinsured against the elements.

Region

% of SMEs with lost revenue due to bad weather

% SMEs underinsured against bad weather

Wales

78%

61%

London

75%

51%

North West

74%

59%

Scotland

70%

68%

UK Average

69%

60%

North East

68%

49%

Midlands

67%

61%

Yorkshire

66%

63%

South West

65%

56%

South East

64%

67%

East

61%

61%

However, across the UK a quarter (25%) of SMEs took heed of last years’ winter storms taking out insurance for weather related damage to protect them against the elements.

Commenting on the findings, Drew Wotherspoon from Towergate, said:

“Small businesses are the lifeblood of the UK economy and are responsible for livelihoods up and down the country. But too many firms are not protecting themselves against the erratic nature of British weather, leaving themselves open to footing the bill for substantial damages and losing out on business earnings.

“It’s vital that small business owners take heed of weather warnings and take precautionary measures to allow them to weather the storm and get back to business as quickly as possible. There are few practical steps business owners can take to make sure they’re equipped - from putting a backup plan in place to taking out specific policies against the elements.”

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