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A new report has highlighted the significant threat posed by climate change to
SMEs and the dire financial consequences facing companies which fail to act to
protect themselves from the risks it poses.
According to AXA, which commissioned the report, the average claim for business
interruption soared by almost 60% in the four years up to 2005, when it reached
£35,000.
AXA’s own research indicates that 90% of businesses are under-insured, with one
in three having no business interruption cover to pay wages and other costs if
the business cannot operate.
The Crichton report, based on new research among SMEs in high risk areas, also
reveals that just 8% of UK businesses have received any form of flood risk
warning and that while most businesses are aware of climate change, only 26% see
it as a real threat to them, with 46% believing climate change is blown out of
all proportion.
The report points to government research that shows average flood damages for UK
businesses could increase to between £5.5 billion and £42 billion each year by
2080 and that around a third of these losses would be from urban drainage
problems.
Professor David Crichton, author of the report commented: “Recent research
reports show we are reaching a ’tipping point’ with climate change.
Even if
global agreement can be reached on reducing greenhouse gas emissions, it is too
late to prevent a rapid growth in extreme weather and sea level rise this
century.
“Small businesses such as the corner shop or the local builder are important for
social cohesion, local employment and innovation.
"They could be the key to making a low carbon economy successful, but they need
more help and guidance to help them survive.
"AXA is publishing an excellent
short guide to risk management for small businesses which should help them.
Peter Hubbard, Chief Executive of AXA Insurance UK added: “SMEs are the backbone
of our economy, employing some 12 million people.
"Climate change poses a real threat to their existence and this is a problem
that to a great extent has been overlooked.
"The insurance industry, government and other relevant parties must work much
more closely together to ensure that businesses understand the scale of the
threat posed to them, and what actions they can take to reduce these risks.”
Source:
RedAlert
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