Almost a third (30%) of hotels and catering firms in the UK are looking to cut costs due to the rising prices of raw materials, according to research by NIG, a leading commercial insurer.
One in 20 hotels and catering firms (5%) in the UK – equivalent to 6,000 businesses – stated that they were thinking of changing business processes and/ or products to accommodate raw material price rises.
The research also found that around one in ten (8%) hotel and catering firms said they were worried that they were underinsured against damage such as a fire or flood given rises in the costs of raw material. Over one in ten (11%) – equivalent to 14,000 businesses – admitted that they had suffered a theft of raw materials, stock and even office equipment from their premises over the past 24 months.
Martin Hall, Director of Commercial Underwriting at NIG, said: “The UK hotels and catering sector is facing a number of challenges and the rising costs of raw materials has clearly become a key concern for the owners of hotels, caterers and similar businesses.
“While many are taking steps to cater for these challenges, it is vital that businesses assess the risks they face and make sure they are not leaving themselves exposed to unnecessary risks and threats. If companies have changed processes, products or moved property, for instance, they need to let their insurance broker knows as this could impact their cover.”
The vast majority (97%) of firms in the hotel and catering sector reported that they had a risk assessment carried out on their business – the highest of the industries analysed by the research from NIG. Over a third (36%) of firms in the sector said they had had a risk assessment conducted in the last three months, although 5% admitted that the last time they had an assessment carried out was over two years ago.
Martin Hall at NIG said: “I would urge businesses to pro-actively contact their broker to discuss a risk assessment and their cover in general. Insurance brokers can provide important advice and discuss practical steps that businesses can take to mitigate the risks they face. The aim of a risk assessment is to determine what measures, if any, are required to safeguard the health, safety and welfare of employees and other third parties, who may be exposed to risks arising from businesses or business activities. It should be seen as a fundamental part of standard business practice.”
Research carried out by BDRC Continental between 6th-14th August 2012 on 500 UK businesses with an annual turnover over £50k. Total number of UK businesses within the scope of this research put at 1.73m by BDRC Continental.