RISK INSIGHT: Establishing a Business Continuity Plan
Business continuity planning can be defined as the formal effort of developing and testing a contingency plan to ensure that business operations can continue after a disaster. Selling this to your company’s leadership is important. They will need evidence that it is worth devoting time and resources towards the Business Continuity Plan (BCP). Getting their personal buy-in is crucial to drive the organizational effort from key individuals supporting the planning process. To answer the question of “why is this necessary?” consider the following benefits a BCP can provide:
- Protect the safety and health of employees and customers
- Ensure continued business operations in the event of an emergency or disaster
- Preserve shareholder value
- Mitigate insurance costs and create a level of comfort with underwriters
Emergency or Disaster?
In the scope of business continuity planning, an emergency is much different than a disaster. The two terms often get used interchangeably, but they focus on entirely different aspects of an incident. This is an important distinction to make when discussing the planning efforts with your company. An emergency is a short-term, dangerous incident that requires action. An emergency response plan should focus on the immediate reaction to the situation. This includes ushering employees and customers to safety via evacuation routes, triggering a call tree to inform necessary contacts of the event, and assisting local authorities as they arrive on-site. There should be a designated individual to inform the police, fire department and/or paramedics of the facility layout and important items such as the location of the utility shutoffs valves. A disaster is an accident or event that results in multiple days of significant physical damage, loss of goods, death and/or shutdown to an operation. A business continuity plan is meant to be an organization’s formal response to a disaster and mitigate prolonged business interruption. The plan should focus on items such as the following:
- Communication plan to customers, families, community, investors, vendors, etc.
- Facility/Equipment recovery
- Information Systems recovery
- Salvage/Assessment efforts
- Vital records recovery
The full M3 Risk Insight “Don’t Get Burned: Your Guide to Establishing a Business Continuity Plan” can guide you through “How to Prepare” and “Items to Consider” when creating a solid business continuity plan.
Consult your insurance advisor to learn more and to obtain guidance, templates and other resources.