Aon has published a report on the risks faced by businesses from bird flu.

The first outbreak of the disease has already hit Europe, and the World Health Organisation (WHO) has urged countries to prepare for the massive social and economic disruption that a pandemic could cause.

Aon's report highlights that insurance markets currently offer little protection from avian flu, pushing the need for robust business continuity planning to the top of the corporate agenda.

The WHO has estimated that the disease may debilitate up to 25% of the workforce at any one time and the UK's own contingency plan puts this figure as high as 50%.

Aon's report highlights that an outbreak of the flu pandemic would debilitate the workforce and cause business supply chain interruption as travel, tourism and trade are shut down.

In spite of these risks, research by the Chartered Management Institute shows that businesses have given little consideration to the possible impacts of a flu pandemic.

Hugh Leighton, risk consultant at Aon, said: “Businesses must acknowledge that the outbreak of a flu pandemic is a genuine risk and one of the greatest threats to future performance. Experts describe an outbreak in terms of ‘when', not ‘if'.

"Broadly speaking a pandemic will be an uninsured event whereby the cost will be retained by the business. Contingency planning should be a top priority for directors. To ignore this risk is tantamount to a dereliction of duty”.

“We encourage all companies to assess their current level of preparedness and to take measures to mitigate against the disruption caused by a potential outbreak. Insurance cover for loss of business is a particular problem, leaving business continuity as the first and only line of defence."