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The Impact of Bad Weather on Small Businesses

Research from Towergate Insurance on how bad weather affects the business of SMEs across the UK paints a worrying picture.

As the UK braces itself for winter storms, research from Towergate revealed in late 2016, many of the country’s micro, small and medium-sized enterprises (SMEs) were ill-prepared for the affects of bad weather.

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 is 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.

The 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 disruption 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 SMEs 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. 

Region % of SMEs with lost revenue due to bad weather % SMEs without insurance for bad weather
Wales 53% 72%
London 67% 69%
North West 68% 66%
Scotland 74% 55%
UK Average 65% 69%
North East 64% 82%
Midlands 71% 64%
Yorkshire 79% 66%
South West 58% 70%
South East 65% 76%
East 62% 70%
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Towergate's checklist for preparing your business for bad weather:

  • Have a list of emergency contacts such as plumbers easily accessible

  • Consider backing up any computer records and storing them off site. Think about what you will need to continue to run your business and support any business interruption claim

  • Ensure that any important paper documents are protected or stored off site or copied

  • Ensure you have emergency contact details for the landlord or managing agent

  • If the premises are unoccupied or become unoccupied you should notify your broker or insurance company. Water 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 the location of the stop cock 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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About the author

Alison Wild Bcom Hons MAAT MATT Taxation Technician Commercial Tax Pensions Insurance And Marketing Specialist AuthorAlison Wild BCom (Hons), MAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.