Business Continuity Plans reduce insurance premiums and save businesses
15th February 2012
New research from the British Insurance Brokers’ Association (BIBA) and the Cabinet Office has revealed that the business continuity plans are likely to stop businesses from failing after a major disruption such as a flood or fire.
The majority (96%) of respondents with sufficient information on business continuity felt that having a business continuity plan in place would keep businesses trading or reduce the costs they would incur when they would have otherwise likely failed, or it seemed to reduce the cost of the disruption significantly. In addition to keeping businesses running, 62% of respondents said that those with plans benefited from premium discounts, reduced excesses and doors opening to new insurance markets.
Insurers supported this too, with 83% of those asked, saying that they would provide a discount or improved insurance terms to a business interruption policy if a business continuity plan was in place.
The survey showed 74% of all emergencies against businesses were water or fire related. With flood and escape of water (41%) and fire (33%). Small businesses appear to be most at risk from the effects of a major disruption, with only 5% of respondents believing that small and micro businesses have plans in place.
Francis Maude, Minister for Cabinet Office, said: “This survey has underlined the need for simple guidance on business continuity aimed at smaller firms. This echoes the commitment made by the Government in the Strategic Defence and Security Review to provide support to SMEs by improving their business continuity.”
Graeme Trudgill, BIBA Head of Corporate Affairs, said: ”The results are quite striking with small businesses potentially very vulnerable and we look forward to taking these findings from senior executives within the insurance industry forward with the Cabinet Office. Our joint aim is to produce guidance to businesses, especially small businesses to help them to understand the importance and significant benefits of business continuity plans”.
The survey was conducted with BIBA and the Cabinet Office among BIBA members and Insurer partners, aiming to better understand the benefits that having resilience measures in place offer. The research can be viewed here
Notes to editors
1. For further information please contact:
BIBA press office:
Leighann Forsyth, Head of Communications
020 7397 0223
2. About British Insurance Brokers' Association
The British Insurance Brokers' Association (BIBA) is the UK's leading general insurance organisation representing the interests of insurance brokers, intermediaries and their customers.
BIBA membership includes 2,000 regulated firms. BIBA brokers handle around half the value of all UK home, contents, motor, travel, commercial and industrial insurance policies. Insurance brokers make a direct and indirect contribution of 1% to UK GDP.
The UK insurance industry employs more than 275,000 people, generates more than £1.5 billion of insurance premium tax and £2 billion of corporation tax.
Brokers provide professional advice to businesses and individuals, playing a key role in the identification, measurement, management, control and transfer of risk. They negotiate appropriate insurance protection tailored to individual needs.
BIBA is the voice of the industry advising members, the regulators, consumer bodies and other stakeholders on key insurance issues. BIBA provides unique schemes and facilities, technical advice, guidance on regulation and business support and is helping to raise, and maintain, industry standards.