SMEs Warned to be Better Prepared for Possible Harsh Winter

Estimated cost of repairing burst pipes last year alone was £600m for UK SMEs

SMEs need to be better prepared this time round - NIG offers best-practice tips

Leading commercial insurer NIG is warning UK businesses to be better prepared for the cold weather this winter following the harsh conditions that deeply affected the country's small and medium-sized businesses in 2010. NIG estimates that repairing broken and frozen pipes cost SME's £600m alone during last year's winter; the Federation of Small Businesses (FSB) put the daily losses to the UK economy at £1bn during the period. A quarter of small businesses had to close during the severe weather, many for at least five days, costing the majority up to £5,000, according to figures from the FSB.

Allister Meal, Risk Control Manager at NIG, said: "December 2010 was the coldest December in the UK since 1910 and the winter before was the coldest since 1978. It's imperative that UK businesses are better prepared for the disruption that can be caused by severe weather and for them to adopt best-practice measures to help them continue trading or minimise business losses. Looking back over the claims settlements made by NIG, many of these could have been avoided or minimised with some simple preventative measures."

NIG is offering the following tips for UK businesses:

1) Protecting People

Slips, trips and falls increase over the winter months due to a combination of factors, frost, ice and snow combined with reduced daylight hours, decaying leaf litter and generally wet conditions. To reduce the risks, firms should assess the likely risks they face and put in place simple procedures to manage the situation. Consider the following:

Identify footpaths, pedestrian walkways (including short cuts), building entrances, roads and car parks for which your business is responsible;
Ensure areas are well lit, clear of debris, e.g. leaf litter, and are appropriately gritted ahead of freezing temperatures and cleared of lying snow. Pay particular attention to inclines and sloped areas;
Maintain a supply of grit / rock salt and ensure that you have the equipment available to spread this and remove lying snow. For staff involved in these activities ensure they have appropriate warm clothing and footwear;
Ensure that building reception areas are kept clean and dry. Consider absorbent floor mats and emergency cleaning procedures. Purchase wet floor warning signs and ensure they are prominently displayed;
Record the risks identified and the actions taken. Maintain a simple log to highlight the dates and times that an action, e.g. gritting, has been taken; • For more information please go to www.hse.gov.uk/slips/faq.htm

For people using vehicles, consider the following:

In extreme conditions is your journey really necessary?
Is your vehicle ready for winter weather e.g. battery test, wiper blade check, washer (de-icer) & engine antifreeze levels?
Place a shovel, warm clothes, a blanket and de-icer in your boot as a precaution;
Ensure you and all key personnel have a fully charged mobile phone with you;
Don't leave vehicles unattended "warming" with the keys in the ignition;
For more information please go to www.greenflag.com/help/winterdriving.html

2) Protecting Premises

SME business owners should consider the following preventative measures:

Have your premises heating systems serviced at least annually;
Clean out blocked guttering and repair any damaged / broken equipment e.g. down pipes, leaking taps that may freeze;
Know the layout of key services (electricity, gas, water), within your building / across your site and the location of any stop taps / shut off values;
Review heating pipe work and water tanks (particularly those in lofts / attics) and ensure they are appropriately lagged. Consider also any factory process pipe work;
If you are considering the use of any secondary / portable heating devices you MUST ask your broker to forward full details to NIG or your insurer prior to use, to ensure these are acceptable under the terms of your policy;
If any premises unoccupied or cannot be adequately heated / protected, consider disconnecting and draining boilers / heating systems and water tanks.

During periods of cold weather consider the following:

Ensure that premises' heating is maintained at a low level throughout (above 4 degrees C);
Monitor the build-up of snow on vulnerable roofs and ensure its safe removal;
Ensure that premises are regularly inspected during any spells of cold weather in particular over the Christmas holiday period;
If your premises are protected via sprinkler systems, please consider the following:
- Ensure that systems are regularly inspected and maintained;
- Consider external contractors who can review the adequacy of existing frost prevention measures;
- Ensure that vulnerable areas e.g. external pipe work / pump houses / values / lofts / roof voids are lagged and or heated;
- Businesses should contact their broker IMMEDIATELY if you are considering disconnecting / draining (part or full) any sprinkler system, in order that they may contact their insurer.

3) Protecting Business Profits

Even with the preventative measures above businesses may still suffer a loss. If your premises are not open for business how are you going to manage the needs / expectations of employees, suppliers and customers? Preparation of simple but effective Business Continuity Plans (BCP), can save valuable time in the aftermath of a loss and can help you recover your business far quicker after the event.

Emergency Response Actions - would you know how to shut the water supply off in the event of a burst pipe? Do you know which local contractors have the expertise to repair your equipment / systems?

Crisis Communications - do you have up to date contact lists for employees, suppliers, customers? Have you thought how you would contact these groups and keep them informed? Who would co-ordinate all of this?

Return to Work - if your business is closed / disrupted for a few days or even a few weeks how would you prioritise your return to work. If extensive damage has been caused which systems / equipment are the most important to you and what would you look to recover first? Similarly with customer contracts which ones are vital to your business and which would you prioritise first in line?

Business Interruption cover - BI insurance cover provides cover for any loss of profits incurred by the business due to an interruption caused by an insured peril. BI cover is provided as standard within NIG's package range of products. It is an optional cover on its bespoke range of combined policies where the cover can be tailored to the specific needs of each individual customer.

For more information on Business Continuity Planning NIG suggests looking at a free software tool developed by the RISC Authority which is available at https://robust.riscauthority.co.uk

Allister Meal at NIG, added: "Every winter millions of pounds of damage are caused to businesses from burst pipes, roof collapses and other hazards. By taking some basic precautions and planning ahead, many incidents can be prevented or the effects of damage minimised. While we cannot predict exactly what the weather will be like this time, we do know is that we've now had three consecutive cold winters that has seen NIG receiving claims spikes for things such as escape-of-water claims. Insurance, including business interruption cover, plays a fundamental part of the way SMEs and UK businesses prepare and protect themselves when the weather impacts their livelihood."

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Notes to Editors:

NIG provides insurance solutions to small to medium sized businesses throughout the UK. Established for over 100 years, NIG provides its insurance exclusively through a network of over 3,200 brokers.

By working closely with our selected brokers, NIG provides a wide range of insurance products for commercial needs protecting businesses.

NIG is part of The Royal Bank of Scotland Group's Insurance Division, the second largest general insurer in the UK.