While sometimes we can anticipate a big snowstorm or flood and prepare ourselves accordingly, many times disasters come quickly and without warning. According to the Insurance Information Institute, as many as 40% of businesses never reopen their doors after a disaster.
Business continuity planning isn’t just for hurricanes or earthquakes though. In fact, even a relatively minor fire that forces you to shut down operations can carry many of the same challenges as a worst-case scenario event. While your commercial property insurance policy would help you rebuild your physical infrastructure, you need to also equip your business to deal with the loss in revenue and mounting expenses while you work to restore your operations.
The best way to prevent a disaster from putting the future of your business at risk is to have a formal continuity plan in place.
Business continuity planning involves:
• Defining potential risks
• Determining how those risks will affect operations
• Implementing safeguards and procedures designed to mitigate those risks
• Testing those procedures to ensure that they work
• Periodically reviewing the process to make sure that it is up to date
Developing Your Plan
To get started, you will need to create a cross-functional planning team. It should have representation from across your business to give a good line of sight into all aspects of your operation. Take an “all-hazards” approach to the planning process– the probability that a specific hazard will impact your business is hard to determine, so you should consider a variety of different threats and hazards and how likely they are to occur.
A business impact analysis to determine and evaluate the potential effects of an interruption to critical business operations can predict the consequences and give you a good idea of how you would be affected if you had to close temporarily. Typical goals of your business continuity plan should include:
• Protecting the safety of employees, visitors, contractors, and others at risk from hazards at the facility
• Maintaining customer service by minimizing interruptions or disruptions of business operations
• Protecting facilities, physical assets, and electronic information
• Preventing environmental contamination
• Protecting your organization’s brand, image, and reputation
Putting it in Action
Implementing your plan involves more than merely exercising it during an emergency. It means acting on recommendations made during the hazard analysis, integrating the plan into company operations, training employees, and evaluating it on an ongoing basis.
You should also test the entire plan annually to help identify any factors that may necessitate updates, such as new regulations, new hazards, or operational changes.
We can help
It can be a daunting task to plan for significant business interruption—but it doesn’t have to be. No business owner wants to think about what would happen to the business if disaster strikes, but it’s a reality that needs to be faced.
Our team of business insurance experts can help. From assessing hazards to implementing safeguards, and ensuring your plan stays up to date, we can help you get the coverage you need. Contact us today for a no-obligation quote.