The importance of business continuity planning

Cyber-attacks, fires, floods, theft, accidents or illness. Disaster can strike in a number of ways, preventing access to the resources your business needs to operate normally, or leaving you unable to work. However unlikely it might seem, it is crucial to be prepared for the unexpected.

A business continuity plan helps prepare you for what, in the absolute worst case scenario, could affect your business. It is about identifying any possible risks and preparing a plan to be put in place that would alleviate the damage.

Your business continuity plan could be vital to protecting finances, ensuring you can continue to work and earn. While also minimising the chances your customers will go elsewhere while you are out of action. Here are five steps to help you develop your own plan and ensure your business can recover from the unexpected:

Step 1 - Assess the potential risks and impact to your business

It is crucial to recognise the ‘mission critical’ parts of your business which you cannot afford to lose – those you would not be able to work normally without – and identify the risks that could stop you from trading. This could include:¹

Premises: Could you continue working in the event of a fire or flood?
Equipment and tools: What if the tools you use to carry out work for customers were stolen?
Fleet: Are you able to operate if a business vehicle is stolen, or off the road for a period of time?
Computer information and equipment: Could you still generate and store quotes and invoices, manage your business accounts, communicate with customers, and store customer contact details if you suffered a cyber-related attack?
People: Would the business cope if you, or a key member of staff, suffered an accident, or fell ill and were unable to work?

Remember - every business is different. The risks you face, how you can respond, and how quickly you can recover will be individual to you. Take the time to think about your own worst case scenarios.

Step 2 – Develop a strategy to deal with the immediate aftermath of a disaster

Consider the steps you would you need to take to get back to normal. How long might it take you? And at what cost? For example, as our article on what to do if your business is hacked explains, you can lessen the impact to your business through the following actions:

Recognise the problem and take action
Data breach notification
Make a data breach claim
Investigate your hack
Protect against cyber-attacks in the future.

Read the full article for more detail.

Step 3 - Check your insurance policy to see what you’re covered for in a crisis

It is important to review all your business insurance cover as part of the business continuity planning process – to see how it might help you recover from an incident quickly, and to identify any gaps in your cover.

You may wish to consider reviewing:

Property insurance: Does it include cover for temporary premises?
Commercial vehicle or fleet insurance: Are you covered for the cost of a temporary vehicle?
Personal accident insurance: It could step in to pay a lump sum or help replace monthly income.
Cyber insurance: To help you react and recover if your computer systems are attacked.
Tools cover: Make sure your tools insurance offers enough cover to replace vital tools without leaving you out of pocket.
Business interruption insurance: Does your policy offer enough cover? Underinsurance could leave you out of pocket if the time comes to make a claim.

Look carefully at any policy excesses you might need to pay and then factor these costs into your business continuity plan.

Step 4 – Review, test, communicate, monitor

The continuity plan is there to maintain business in the event of an emergency. It is crucial that all employees (new and existing) are aware of such a plan, and are able to access it at any given time. Regular reviews are critical to maintaining good preparation. Be sure to test it to iron out any problems – after all, you don’t want to discover holes in your plan when you really need it.

Step 5 – Seek a second opinion

A successful business continuity plan requires the flexibility to be creative, within a given situation, and not be burdened by strict compliance and detailed procedures. A business continuity plan should identify decisions (including options) to be made during a disaster. Ask your broker to review your business continuity plan and get a second opinion.

Get help with your business continuity plan

Our business continuity and disaster recovery planning service provides comprehensive support to you in the preparation of a business continuity and disaster recovery plan. We:

Conduct a risk assessment and an analysis of the impact on your business in order to determine the magnitude of the exposure to threats.
Develop and document a concise and easy to use business continuity plan.

Find out more about this service or to discuss further, please contact the Marsh Commercial Risk Management team.

^Sources:

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