BUSINESS owners are being urged to draw up contingency plans and to double-check their insurance as hundreds of firms count the cost of the blaze at the Buncefield oil depot in Hemel Hempstead.

More than 400 companies in the Maylands industrail estate near Buncefield were prevented from entering their premises as the fire, which broke out early on Sunday morning, raged for days.

Tim Hutchings, chief executive of Hertfordshire Chambers of Commerce, said: “We estimate that the damage and the loss of business will be between £500 million and £1 billion.”

Asos, an online fashion retailer, suffered damage to its warehouse which held stock worth £5.5 million, while Scottish & Newcastle, Britain’s biggest brewer, said that there would be disruption of supply to wholesalers and off-licences as one of its distribution centres was affected by the explosion.

While damage to premises caused by a such a catastrophe would be covered by most basic business insurance policies, firms that do not have business interruption or denial of access cover would not be able to claim for any additional costs.

Malcolm Tarling of the Association of British Insurers said: “Many businesses realise that they must insure their bricks and mortar, but they also have to think about covering themselves against the consequences of a fire or an explosion. They may want to think about covering against the cost of relocating while the property is being repaired.”

About three quarters of small businesses mistakenly believe that material insurance will cover them for loss of profits after a major business disturbance, according to a survey by Zurich, the insurer.

It found that business interruption usually costs small firms thousands of pounds. One in ten small businesses claimed more than £3,000 for business interruption last year, while 5 per cent claimed more than £5,000, Zurich said.

The Federation of Small Businesses says that smaller businesses have to weigh up preparing for a disaster against the cost of doing so.

Simon Briault, of the federation, said: “In an ideal world, businesses would be able to insure themselves against everything, but the reality is that small businesses face demands on their finances from every direction. Prioritising the risks and dealing with them is key.”

Some businesses can continue to trade even if they have been affected by fire or other damage thanks to contingency plans. But a recent survey found that two thirds of businesses have made no provision for staff to work from home in the event of disruption. Cable & Wireless, the telecoms company, said almost half of companies do not back up data and fewer than one in three have updated continuity plans since the London bombings on July 7.

Fledgeling firms may not consider going to the expense of backing up all their computer systems or finding an alternative site in case their main office is damaged.

However, the Institute of Directors says that this should be a priority. A spokesman for the IoD said: “The recent fire at the Buncefield fuel depot is a further reminder of why companies, large and small, need to prepare for all eventualities. Company directors have a responsibility to develop contingency plans that involve relocating technology, people and processes: everything from backing up data off-site, having access to alternative facilities, to giving employees the technology to work from home.”

Businesses indirectly affected by a catastrophe such as Buncefield will find it more difficult to prepare themselves. Mr Hutchings said: “Although around 400 businesses on the site have been directly affected, the collateral damage has been much larger. There are local recruitment and catering companies who have lost a lot of their customers this week.”

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