Businesses carrying out disaster recovery planning should balance the cost against risks they are seeking protection against, one industry expert has advised.

While it may be obvious what poses the greatest risks, insurance payouts can be paid too late for the business to survive, according to Frances Coulson, a spokesperson for recovery specialists R3.

Outlining the wide variety of risks faced by companies, Ms Coulson commented that "breakdowns in IT and other equipment and even terrorist attacks can affect business".

She advised: "Whatever contingencies you can think of, weigh up what the possible risk is and how far you can go to mitigate it or have a replacement ready."

Meanwhile, research from Disaster Recovery Solutions has suggested that four in five firms do not have any crisis management systems which would provide sufficient IT coverage to keep the business functioning effectively.

Of companies which do have crisis management plans, it found 40 per cent do not have a team dedicated to disaster recovery.

A recent survey for Connect found that one in ten companies has lost important data as a result of a backup failure. The company has now developed a unique online backup service - http://www.totalrecall.co.uk – for SMEs to ensure they can survive any disaster