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Many small and medium-sized businesses are putting their futures at risk by failing to implement proper business continuity plans, a leading insurance expert has warned.

Britain's recent flooding crisis has once again demonstrated the need for businesses of all sizes to have proper business continuity plans in place. Furthermore, a recent survey by research analysts Populus found that many UK firms are unprepared for many situations that could feasibly come to affect their future business success.

Now Steve Foulsham, technical services officer for the British Insurance Brokers' Association (Biba), has warned that business continuity failures could come back to haunt UK businesses.

"We were concerned that around 50 per cent of these small businesses that we looked at had no plans to keep their business running following a fire or flood, which of course has been very relevant recently," he said.

"Also, 79 per cent of them had made no real plans to deal with terrorism. So you only need to look at those to see that clearly there is a big, big problem.

"It won't look good for the government, or indeed the insurance industry if, following a terrorism attack, you have a loss of small businesses that fail because they haven't really considered their alternative plans to try and continue through the disaster."

The insurance costs for the country's recent flooding crisis is now expected to top £2 billion.

Research for Connect in 2007 found that 88 per cent of UK businesses were interested in Disaster Recovery systems primarily to protect their critical applications and data