The right plan can make the difference between a quick disaster recovery or your business becoming another foreclosure statistic. As the number of natural disasters, civil unrest and cybersecurity breaches appear imminent, preparation and response procedures can lower your risk. Avoid interruptions with a business continuity plan that can: 

• Protect your employees & customers
• Prevent environmental contamination
• Preserve your business’ revenue, assets & data
• Evade potential loss or contain damages
• Defend your reputation

Steps to Reduce Business Interruption Risks

Use these recommendations to prevent and protect your organization from devastating exposures.

Analyze Your Potential Risk

Internal and external factors can cause operational interruptions. Exposures can be environmental (e.g., wildfires, hurricanes) or human (e.g., civil unrest, data breaches). While evaluating your business’ risks, also evaluate whether each exposure risk is preventable.

A thorough concept of your business’ direct exposures will provide a better understanding of: 

• All elements involved
• Any assets that could be at risk
• Your organization’s vulnerability
• The ultimate impact of the risk

Evaluate each exposure individually and consider its potential occurrence and severity of impact on your operations. 

Estimate an Interruption’s Overall Expense

An estimation of your business’ most susceptible risks will allow for calculations of each risk’s impact. Consider the following when forecasting cost containment. 

• Lost sales & income
• Heightened expenses
• Regulatory fines & contractual penalties
• Business stoppage

Review Your Insurance Coverage

 If your insurance program includes business interruption, it will become effective when: 

• Your physical premises have enough physical damage to suspend operations. 
• Property covered under your insurance policy is damaged to the point employees and customers are unable to access the business. 
• Your property damage is covered by an insurance policy and a government area closure prevents your employees and clients from accessing the business. 

Coverage for business interruption can vary significantly. Work with your broker to make sure you understand the policy terms (e.g., exclusions, coverage limits, waiting periods). 

Prevention & Mitigation Opportunities

Businesses have three options to control and contain potential hazards such as:

• Obstruction: Your business identifies preventable hazards and then implements steps to avoid the exposure. 
• Deterrence: Your company identifies potential criminal activities that could create business risks and take preventative steps.
• Reduction: Your organization identifies unavoidable hazards and takes steps to control and contain the exposure.

Establish a Crisis Communication Plan

A crisis communication plan offers employees and customers updates and critical information. Your message strategy should include:

• Chain of command: Allows for information to be shared efficiently and ensures that all personnel receive communications needed.
• Pre-scripted messages: A prepared communication for customers, employees and the public can minimize potential confusion.
• Bi-directional communication network: Utilize multiple tools and directions for communication to pass along information efficiently.

Prepare an Emergency Plan

Formulate a disaster strategy and have it in place before a hazard occurs. Ensure its effectiveness through regular practice and plan review. A good emergency plan should include: 

•  IT & data recovery: Implement a data backup program that protects and recovers important and sensitive information. Establish a technology policy that can prevent data leaks should operations need to be fully remote.
• Contracts: Create written contracts with other businesses and external suppliers to continue to fulfill customer commitments.
• Resources: Evaluate and generate an inventory of essential resources that are imperative to regain operations quickly.
• Test: Regularly conduct penetration testing, tabletop exercises and other tests to verify the plan’s success.

We’re Here to Help Protect Your Business Interruption Risks

With a little work, it is possible to minimize potential hazards and limit their impact on your operations. If you have questions about how to lower your business’ interruption risk or assistance to review and update your emergency plan, connect with a member of our team