The recent fire at the Buncefield Oil Depot in Hemel Hempstead, which caused many nearby businesses to stop trading temporarily, will force small and medium companies to take their business continuity planning more seriously, according to insurance broker Alexander Forbes.
The fire at Buncefield, the largest seen in Europe for over 60 years, is expected to result in £50m of property claims from businesses located close to the oil depot as well as business interruption claims in excess of £20m.
Roger Brown, CEO of AlexanderCorporate Risk Solutions, said: “The loss of earnings incurred by businesses near Buncefield will force companies to reassess their business continuity management programmes.
“Most companies comfort themselves with the thought that they have business interruption insurance (BI) which will pay for loss of earnings in the event of a major disaster. But the basic BI policy does not provide cover for incidents which do not result from damage to property – and these are more common than you might think.
"If a customer was put out of action and they no longer required your services, then you would not be covered unless the right policy extensions had been included. The same would also be true if customers or staff could not gain access to your business due to damage in the vicinity, as occurred at Buncefield.”
