Having proper business income limits can assure your business can recover after a disaster. Just as important though are Business Continuity Plans. These plans are often in expensive and put you in a position to continue your normal business operations in a timely fashion.
What is a business continuity plan?
- A Business continuity plan is a plan that is designed to continue operations if your business is affected by a disaster. Whether the business is affected for a short term or long term, the plans purpose is to get your business back up and running avoiding lengthy business interruption
How to create a business continuity plan in 4 steps:
- Identify threats or risks Understanding the risks that could leave employees, customers, vendors, property and operations vulnerable is fundamental. Threats can include, but are not limited to natural disasters, malicious attacks, power outages and system failures. Identify the risks most likely to occur based on historical, geographical, organizational and other factors. Then weigh the probability of each event against its potential impact to your business, as well as your readiness to respond.
- Conduct a business impact analysis Identify the people, places, providers, processes and programs critical to the survival of your business. What functions and resources, if interrupted or lost, could impact your ability to provide goods and services or meet regulatory requirements? Consider who and what is absolutely necessary to restore critical operations. Then prioritize the need to restore each item after the event. Plan to use limited resources wisely. Complementary functions can always be restored later.
- Adopt controls for prevention and mitigation Prevention and mitigation planning and activities are intended to help prevent an event (such as a fire or explosion from unsafe conditions) as well as to reduce the impact or severity of an event (such as relocating critical equipment to a higher elevation in flood-susceptible areas). Your prevention and mitigation plans should address, among other things, emergency response, public relations, resource management, and employee communications.
- Test, exercise and improve your plan routinely a business continuity plan is an evolving strategy that should adapt to your company’s ever-changing needs. Test and update it regularly – yearly at a minimum – or any time critical functions, facilities, suppliers or personnel change. Train employees to understand their role in executing the plan, too. Exercises can include discussions or hypothetical walk-throughs of scenarios to live drills or simulations. The key is to ensure the plan works as intended.
Source: Travelers Insurance (2015) Create a business continuity plan in four steps. Received from: https://www.travelers.com/prepare-prevent/protect-your-business/business-continuity/create-plan.aspx