Small business owners must take precautions in order to prevent fridge or freezer malfunction due to a loss of power during the hot summer months, says insurer RSA.

Even a small incident or power cut lasting only a few minutes could potentially prove costly for business owners.

UK consumers spend £5 billion on frozen food every year, with caterers using a further £2.5 billion of frozen goods. Small businesses, including grocers, petrol station owners and newsagents all rely heavily on fridges and freezers to store goods on site.

It is crucial for business owners to have and maintain back-up generators for all fridges and freezers, in order to prevent goods from being ruined if the main electricity supply is cut or damaged in any way.

To reduce the risk of having a large fridge or freezer related loss, business owners should:

• install and maintain back-up generators;
• install temperature controls and alarms with remote signalling to inform the owner that the unit is gaining or losing temperature.  Alarms are available to ensure temperature range is sufficient for the type of stock being stored;
• if practical, keep a spare storage fridge or freezer to transfer goods into in the event of a problem;
• train all staff how to respond in the event of a refrigeration unit breaking, including how to start the back up generator; and
• determine at what stage of defrosting stock is considered beyond use.

David Greaves, SME trading director at RSA, said, “Businesses need to take precautions, especially during the hot summer months to ensure they are maintaining all electrical equipment on their premises. If a fridge or freezer breaks down, they may have to throw away stock and then replace it all. Following RSA’s risk assessment guidelines could save small businesses significant unnecessary cost.”

Bad things happen. It’s a fact of life. But with a little preparation, businesses can mitigate some of the impact.

There are some estimates that 80 per cent of businesses with no business continuity plan fold in the aftermath of a major disaster. And while this could be something along the lines of a national emergency such as a terrorist attack or health epidemic, it could just as easily be something closer to home, for example the incapacity of a key member of the business. Or it could be something as simple – yet damaging – as a strike leaving you out of contact with your customers.

Putting a plan in place can not only help you arrange procedures for dealing with emergencies; it also provides a step-by-step guide for individuals to follow when they may be finding it difficult to make decisions – giving them a route to follow will help them work through the crisis.

“By developing a simple plan, a business continuity plan, you can protect your business to ensure that no matter what disaster strikes you are prepared and “Business as usual” is the only thing your customers and suppliers see,” says Colin Ive from SME Continuity.

Your first step, according to the Contingency Planning and Disaster Recovery Guide, is to prepare a list of all the potentially serious events that could happen. This doesn’t necessarily mean listing all the disasters that could befall you, but looking at the issues that would affect your business. So instead of listing swine flu, ebola or any other illness, the list would include something along the lines of staff shortages or key person unavailability.

For each potential issue, you need to come up with a process to follow – the key people involved, any suppliers that need to be contacted, a list of contractors who may be able to support you and, vitally, any insurance policies you can claim on.

While business insurance won’t be able to completely prevent any effects of a disaster, it can help to mitigate any costs you may incur. Key Man Insurance can provide a cash injection into a business in the event of the untimely death or incapacity of a specified member of staff. The funds can be used to offset any loss of revenue caused by that person’s absence, or to recruit or train a new person in that position.
If your business is hit hard, and has to stop trading for a short period, Business Interruption insurance can help to tide you over. It’s a short term solution for a few weeks and is there specifically for if you have to stop trading due to factors outside your control – it doesn’t cover a downturn in trading conditions.

If the emergency is a bit closer to home, public liability insurance and employers’ liability insurance will protect you from claims for issues that arise on your premises. We live in a culture of litigation and if an injury or damage could be found to be your responsibility, then expect a hefty bill.

Forty percent of businesses are failing to conduct fire risk assessments in accordance with legislation implemented three years ago, warns Aviva Risk Management Solutions (ARMS).

Based on this unsatisfactory level of compliance with the Regulatory Reform (Fire Safety) Order 2005, Fire and Rescue Services have issued businesses with 34,500 informal notifications, 3,200 enforcement notices, 442 prohibition notices and 84 alterations notices.

And fire authorities prosecuted 43 per cent more organisations last year for failing to comply with any part of the order.

Andrew Couch, health and safety consultant for ARMS, said: “Though fire service audits increased 20 per cent last year and the number of enforcement notices has fallen, satisfactory compliance rates have remained virtually unchanged in the past two years³.

“As the figures show, this is not going unnoticed by the authorities and is leading to enforcement action. And an increased level of audit activity focusing more on higher risk premises such as care homes, hotels and hospitals will bring more and more firms under the spotlight.”

Successful prosecutions can lead to significant fines. Last November, the high street fashion chain, New Look was fined £400,000 for fire safety breaches at a London branch*.

To help small businesses comply with legislation, ARMS has launched a service in which its risk assessors will conduct fire assessments on a firm’s behalf, producing formal documentation, identifying fire risks and providing evidence that the requirements of the RRO have been fulfilled.

If shortfalls are identified, risk assessors will advise businesses on how fire risks can be improved. This will include details of relevant preferred supplier solutions at competitive prices.

Couch continues: “Often businesses tell us that they either don’t have the time, don’t know where to begin when it comes to fire safety, or they need additional support and advice from someone who knows what they are talking about.

“But failing in the basic responsibilities of completing fire risk assessments means that firms are not only breaking the law but also not managing the hazards on their premises.

“The use of risk assessors to conduct health and safety consultations is a cost effective way to bring in the necessary expertise to ensure fire safety. It can be a useful business strategy until businesses are in a position to appoint their own suitably qualified employee to conduct fire assessments.”

The risk assessment will include a fire safety policy, which identifies fire risks such as combustible or flammable materials and incorporates procedures for evacuation, as well as making recommendations to improve fire risks.

Many home-based businesses do not have adequate insurance to cover them in the event of a crisis, according to research from Direct Line for business.

The majority of business owners have not thought of the consequences to their lives if something were to go wrong. Many may find themselves strapped for cash in the event of their business being unable to trade, as only 12 per cent have some form of business interruption cover.

Businesses based at home also fall short when it comes to protecting their assets if liable for an accident or product fault. Only 32 per cent have public liability insurance and just 11 per cent have product liability cover, leaving them vulnerable if anyone was to make a claim against them.

Kate Syred, head of Direct Line for Business said: “With so few businesses being protected from a liability claim, or an unexpected pause in trading, this research highlights the need for business owners to think about specific business insurance. Without it, dreams of being a business owner could quickly become a nightmare.”

Many business owners based at home incorrectly think their normal home insurance covers them in the event of a claim for their business. Whilst the research found that 82 per cent have home contents insurance, only 34 per cent have office contents cover and only 18 per cent are covered for the loss of their tools, mobiles and equipment.

According to Kate Syred, business owners who rely on their home insurance may be in for a shock when making a claim: “Many people set up a business from home because it’s a cost effective solution. However, you still need insurance for protection in the event of something going wrong. A standard home insurance policy may have limited, if any, cover and many businesses relying on this could find it difficult when it comes to making a claim.”

The Post Office has launched a new business insurance, available from today, further extending the range of services offered to UK businesses at Post Office branches.

Post Office Business Insurance can be tailored to meet the needs of businesses of all shapes and sizes. Businesses can select the cover that meets their individual requirements, with insurance available to include:

• Protection against fire and theft

• Employee and public liability

• Professional indemnity

• Tools/equipment

• Business interruption e.g. if machinery breaks down or an accident closes your business temporarily.

The Post Office says it can cover 95 per cent of small businesses.

Duncan Caesar-Gordon, Post Office head of business insurance, said: “The Post Office is at the heart of every local business community and our new policy will make it even easier for small companies to find business insurance without having to trawl the internet or look around.

“Millions of businesses use the Post Office everyday for our business banking and cash services and we can now support them even further with our simple to apply for Business Insurance.”