Could Your Business Survive a Disaster? Keeping the Tills Ringing

By SME Insurance

Posted 23/02/18

man looks happy as he eats fried chicken

From high street shops and independent restaurants, to nationwide city centre franchises – sometimes things happen outside of your control that could affect the running of your business. So, how can you be best prepared if things goes wrong?

Let’s take a look at some recent examples and also see how you can minimise the impact of an incident on your business.

KFC: Why Didn’t the Chickens Cross the Road to Reach their Restaurants?

Although chicken is the “bread and butter” of KFC’s business, they recently had to shut down over 600 of their 900 UK restaurants due to shortages of this key ingredient. The brand has claimed that two thirds of their UK branches were closed down due to “teething” problems with a new distribution supplier. This left KFC owned restaurants and franchisees across the country unable to keep up with food orders.

Despite KFC going into overdrive to try and resolve the situation as quickly as possible, the impact was still felt by customers – resulting in a social media storm with dedicated hashtags like #chickengate and #KFCCrisis trending on Twitter, and one London police station even had to ask people to stop calling them to report the shortage [1].

Floods: A Complete Wash out

Thousands of small businesses across the North of England and Wales were destroyed in the heavy floods of December 2015 [2]. During this disaster there was a huge demonstration of community spirit across the North, with businesses like comic book shop 2 Tone Comics in Hebden Bridge and Seagulls Paint in Kirkstall reporting that it was volunteering and fundraising from their local communities that helped them get back on their feet [3]. Unfortunately many of the businesses affected by the floods which included  shops, cafés, and restaurants had inadequate insurance leaving  them unable to claim for the costs of getting back on their feet, and some faced ruin because of it [4].

The Chef: Cooking up a Public Relations Disaster

Recently a restaurant suffered a huge increase in negative reviews on Tripadvisor after their head chef bragged about “spiking” a vegan’s meal in a public Facebook group. The chef eventually resigned and Tripadvisor removed the reviews, but the damage had already been done [5]. This story clearly shows the importance of having a social media policy in place for staff which dictates how they should act when representing or discussing the restaurant online. Once something like this has happened there is unlikely to be an opportunity to remove the online stain against your business.

Prevention is Better Than Cure

So here are some tips that could help you prepare to safeguard your business should the unexpected happen.

Create a Contingency Plan

It’s important to create a contingency plan that will help you should anything go wrong. Your plan should list potential disasters, emergencies and threats and have clear instructions on how to deal with them. For example, what to do if you own a restaurant and a sickness bug goes around your staff that affects your ability to cater to guests who already have reservations, if your premises flooded (see here for more advice about flooding), or should you experience a problem with an external supplier, as KFC did. This plan could help you recover with minimal impact to your profits and reputation.  

Be Prepared for Business Interruption
If a disaster such as a flood affected your business you may need to close down whilst the issue is resolved. It would be important that you had a contingency in place for this, as you will still have responsibilities such as paying your staff and rent, whilst you are unable to run the business. Business interruption insurance can keep you going during this time, ensuring that your cash flow and reputation is still intact when you are able to resume business.  Business interruption insurance can even help cover any additional expenses that you have to pay in order to keep the business running, for example renting a temporary premises, as well as the shortfall which occurs due to the loss of business.

Make Sure You Have the Correct Insurance
Insurance can sometimes be complicated, therefore unless you know exactly what you need and are covered for, you may need specialist advice. This is where a specialist insurance broker like SME Insurance Services can help.

Whether you own a restaurant, shop, pub, hotel, or another small or medium sized business we can advise you on obtaining  the right cover. This includes explaining from the outset exactly what is and isn’t covered, so there aren’t any nasty surprises.

We can  provide advice on a whole host of insurances and help you figure out what your business needs. Some of the types of cover we provide include: 

  • Employers liability: This is a legal requirement for anyone who has staff, and you could be fined if it’s not in place. This will help you pay compensation if an employee is injured or becomes ill because of the work they do for you.
  • Public and product liability: This can help protect you should any damage or injury happen to one of your guests or their property.
  • Buildings and contents.
  • Business interruption insurance

If you would like to know more, or obtain a no obligation quotation – please call SMEi on 0330 134 4564  to speak to one of our team of advisers.











Posted 23/02/18

Author: SME Insurance

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