Business continuity plans likely to reduce premiums

The joint survey by the British Insurance Brokers’ Association (Biba) and the Cabinet Office found that 83.3% of insurers questioned would give a discount or improve terms to a business interruption policy if a business continuity plan was in place.

Biba said that the aim of the survey was to develop a clearer picture of the benefits of having resilience measures in place identifying them as: improved competitiveness, continuity of service during common disruptions and more serious emergencies along with reduced insurance premiums and excesses.

The survey of brokers and insurers also found that 61.6% of respondents felt that businesses with a business continuity plan in place would benefit from doors opening in new markets, a premium discount or a reduced excess.

However, respondents felt that only a small number of small and micro businesses had such plans in place.

But for those businesses that struggled to secure cover, the sentiment was that a business continuity plan could make an unacceptable risk more palatable to an insurer.

Very vulnerable
Francis Maude, minister for the 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, head of corporate affairs at Biba, added: “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.”

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