15-05-2007
Firms avoiding business opportunities due to terrorism concerns
Increasing concern over the risks faced by businesses from factors such as terrorism and political violence is causing businesses to avoid investing in politically sensitive areas or locating offices in large cities, according to Lloyd's.
The news reflects recent advice from the British Insurance Brokers' Association (Biba) that small firms need to ensure that they have continuity plans and the relevant small business insurance in place.
Over a third of companies avoid investing in overseas markets for fear of political violence, while 20 per cent have foregone promising business opportunities for the same reason, a new report by the Lloyd's claims.
However, the company says that many of these concerns are misplaced and the risks over estimated.
Lord Levene, chairman of Lloyd's, said there is a gap between what businesses perceive as a threat and the reality.
Despite the concerns, the report found that half of smaller businesses reported that they had either no continuity plan in place at all or one that does not adequately take account of political violence risks.
Recent Biba figures backed this up and revealed that more than half of small firms do not have a business continuity plan in place, and many firms only have a minimal level of small business insurance which may not provide sufficient cover in the event of unforeseen disasters.
