August 31, 2015
Most Small Business Owners at Risk for a Disaster
Survey: 75 percent of small businesses do not have a disaster plan in place, but 52 percent say it would take at least three months to recover from a disaster
Columbus, OH - A new survey by Nationwide released today reveals that three in four small business owners do not have a disaster recovery plan, but more than half say it would take at least three months to recover from a disaster.
Nationwide commissioned Harris Interactive, which conducted an online poll among 500 U.S. small business owners with fewer than 300 employees from June 8–19, 2015.
“Small businesses are least likely to have disaster recovery insurance,” says Mark Pizzi, president and chief operating officer of Nationwide Direct and Member Solutions. “And yet they are the ones most affected by a disaster. That’s why it’s essential for small businesses to have a disaster recovery plan.”
Since there hasn't been a major national disaster in years, America's small business owners may be feeling overconfident — even as they head into the summer storm season and National Preparedness Month (September).
According to the survey, one in four believe the likelihood of a natural disaster occurring in their area is slim (26 percent). Just over one-third (37 percent) say climate change and the weather phenomenon El Nino have decreased the likelihood of a natural disaster impacting their business.
Still, the gravity of the recovery from a natural disaster is not lost on small business owners — as an estimated 25 percent of businesses do not reopen following a major disaster.1
The survey also revealed some other shocking facts:
- While more than a third (38 percent) of small business owners say it is not important for their business to have a disaster recovery plan, over two-thirds (69 percent) have an evacuation plan at home.
- For many without a plan for their business, disaster recovery is simply a low priority (34 percent). Time (11 percent) or cost (15 percent) play little roles in the decision not to have a written disaster recovery plan in place.
- For companies with fewer than 50 employees, only one in five (18 percent) have a disaster recovery plan.
Unfortunately, if a disaster were to occur, 44 percent of small business owners say they don’t have access to generators — and 66 percent don’t even have business interruption insurance.
Having processed more than $417 million in catastrophe claims related to small businesses since January 2013, Nationwide can provide owners with guidance and information to help them prepare, should a disaster strike.
For more facts, tips and information on creating a disaster recovery plan, small business owners can visit the Insurance Institute for Business & Home Safety or Nationwide’s Disaster Planning and Recovery site.
The 2015 Small Business Owner Study was conducted online within the U.S. by Harris Poll Online (HPOL) on behalf of Nationwide between June 8 and June 19, 2015. The respondents comprised a representative sample of 500 U.S. small business owners, defined as companies with less than 300 employees. Results were weighted to be representative of small business owners in the U.S. Research participants were drawn from the Harris Poll Online (HPOL) research panel and partner sample. Because the sample is based on those who were invited to participate in the HPOL panel, estimates of theoretical sampling error cannot be calculated. Percentages were rounded to the nearest whole percent. Differences in the sums of combined categories/answers were due to rounding.
Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the U.S. and is rated A+ by both A.M. Best and Standard & Poor’s. The company provides a full range of insurance and financial services, including auto, commercial, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; banking and mortgages; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com.