It is much harder to recover from the damage to cash flow, reputation and customer relationships caused by a serious interruption to their business. Neil Mercer Axa spokesman

Despite widespread flooding this winter, less than a quarter of small business owners see water or fire risk as a threat to their business, according to Axa's research.

The insurer says the rest - equivalent to more than a million small businesses - do not appreciate the true costs to their enterprise when fire and flood occurs.

In fact, Axa says that the majority of businesses never recover from a flood or fire.

Disaster plan

Nearly nine out of 10 businesses believe that they have adequate cover if a catastrophe should strike.

However, Axa spokesman Neil Mercer points out that while their current insurance might cover buildings and contents the entrepreneur could still be left with a heavy burden.

"It is much harder to recover from the damage to cash flow, reputation and customer relationships caused by a serious interruption to their business."

Just 57% of business people questioned believed that flooding on their premises would have a major impact on their firm.

But the majority of businesses affected by major incidents of this type either never reopen or cease trading within 18 months.

Mr Mercier added that small businesses needed to check their insurance policies to see if there was adequate provision for loss of earnings and put together a disaster recovery plan for the enterprise.