They say when it rains it pours. This was certainly true for millions of people across England this June, which was the wettest since records began. The north was hit particularly hard, with more than 10,000 homes evacuated in Hull alone due to severe flooding and some families expected to be unable to return home for up to a year.

But it's not just families and other essentials such as schools that have been affected. Thousands of small businesses have also been damaged and insurers - for those that had insurance - are working round the clock to assist flooded firms.

The Association of British Insurers (ABI) estimates that 5,000 businesses have been affected by the recent floods and storms. The cost of claims is expected to reach £1.5bn, a figure that could yet rise further. But for those small companies without essential flood and disruption cover, the outlook is much bleaker.

"Many small firms do not think about the consequences of not being able to trade," explains Adrian Scott, director of strategic implementation at insurance broker Jardine Lloyd Thompson. Costs quickly add up: staff wages; the hiring of extra machinery to replace ruined kit; renting new premises while the old ones are restored. Without cover, many businesses simply go under in such circumstances.

But getting the right cover can difficult. Insurance documents are often deliberately lengthy and most business owners do not have the time to wade through each offering. Package or combined policies are tailored to industry sectors, which provide cover against typical risks of, say, a groceryretailer.

However, each packaged policy will be different, with some offering frozen food cover, for example, as standard, while others will not. "Small companies, by their nature, have to be opportunistic in their approach," says Scott. "Those that survive will be expanding and may find that the new business areas are not covered."

One option is to use a specialist commercial insurance broker, which can tailor each policy to suit the particular business. Brokers often offer additional services such as a survey of company premises and risk assessment, as well as yearly policy-updating.

They can also ensure that the level of insurance fits the risk. "The problem is that small firms are still buying insurance based on its cost rather than making a comprehensive assessment of their risk exposure and buying insurance accordingly," says Gary Head, professions underwriting director at insurance broker Hiscox. "It is only when they make a claim that they realise that their losses are not fully covered."

Not only do small businesses risk being under-insured, in some cases they may not be covered at all. Business risks are constantly changing. Figures from the thinktank c2e show there was a 41% increase in claims filed with employment tribunals year-on-year in 2006. Unfair dismissal; sexual, religious, disability and age discrimination; bullying; stress and low pay are now all legitimate reasons to sue an employer, according to Head.

Getting the right cover is essential. A claim or dispute could affect a business both financially and by damaging its reputation. As many struggling owners are finding across England right now, not all business can afford to bounce back from such a blow. Our essential guide to all your insurance needs should help you sift through the minefield and work out what you really need to protect your firm's future.