What can UK businesses learn from the January 2014 floods? Diane Yarrow, Partner at B P Collins, investigates.
It’s hard to forget the devastation that flooding during the wettest winter on record caused to residences and businesses across the UK. According to the Federation of Small Businesses, the January 2014 floods cost small businesses a combined total of £831 million, with those affected each losing an average of £1,531.
Of these small businesses, it’s estimated that about:
- 32% saw a reduction in demand for goods and services
- 29% experienced transport disruption that hindered the movement of goods and supplies
- 16% reported staff absences due to flooding, which affected productivity and put increased pressure on those who were present
Following a rigorous assessment of flood defences, the Environment Agency identified about 1,000 sites that were in need of repair following the floods. The £270 million funding to fix these sites will bring some comfort to the businesses that suffered. But in order to prevent the same costly impact in the future, companies must themselves prepare for, and mitigate, the risk of flooding.
There is some debate as to whether or not the various authorities should have taken precautionary measures to protect against flooding sooner. However, businesses can still take proactive steps to assess the potential risk and reduce the impact of such events in the future.
Identifying potential issues or problems before your organisation is actually faced with them allows policies and systems to be put in place to mitigate the risks posed.
Protecting your business
Ask yourself the following questions:
- what would the impact be if the road on which your business property is based was closed?
- how would a closed road impact on business operations?
- what would happen if employees could not get to the business premises?
- does your business have flexible working policies in place that could allow for business continuation during such events?
- how will your business maintain client service levels?
If these points aren’t addressed, it could result in a loss or reduction of earnings. That’s why you need to have policies in place that address any potential impacts and mitigate them.
By understanding your organisation’s environmental requirements, and regularly reviewing operations, your business can develop a robust yet flexible framework that will minimise risk and improve resilience. Businesses that routinely assess and proactively identify potential challenges are undoubtedly best placed to mitigate the risk of flooding.
In addition, owners of business premises should establish whether or not they are entitled to compensation from the government or their insurers, as terms will become much tougher, if not impossible, to secure near high-risk sites.
By working in partnership with professionals (including a trusted law firm), you can help to prepare your business for future environmental challenges. And having a plan in place to deal with the unexpected can only bring comfort to you and your organisation.
About the author:
Diane Yarrow is a partner at B P Collins LLP. She is involved in a broad range of corporate and commercial matters, including contracts, mergers and acquisitions, business start-ups, restructuring, shareholder arrangements and exit, banking and refinancing projects, compliance and risk management, company secretarial and joint ventures. You can follow BP Collins LLP on Twitter @BPCollinsLaw.