Don’t wait for disaster to strike – have a business continuity plan in place so you can get back to normal operations as smoothly as possible.
Today, companies are facing an all-time high number of exposures. The frequency and severity of weather-related events seem to be increasing, as is reliance on a complex network of technology and ever-expanding supply chains. Both trends leave businesses susceptible to a variety of existing and emerging risks. The survival of any organization depends on managing these risks by creating a business continuity strategy.
Business continuity planning is one of the most critical components of any recovery strategy. Unfortunately, some folks may not even know what is a business continuity plan, as not every company takes the time to develop one. With the help of Travelers Insurance, we’re here to debunk some common business continuity misconceptions and drive home some of the most important reasons you need to have your plan in place sooner rather than later.
Misconception #1: “Our people will know what to do in an emergency.”
Even the best employees cannot be expected to know what to do when disaster strikes. Leaving each to respond in their own way only adds to the confusion of an event. Having a well-documented business continuity plan in advance, and training your employees to follow it, gets everyone on the same page — helping to ensure an organized, safe, and timely recovery.
Misconception #2: “We have insurance to cover our losses.”
Insurance alone is NOT a business continuity strategy (though proper coverage is a significant and important part of the plan). But, even the best insurance may not fully cover some of the peripheral damages from an event, like loss of customers, loss of market share, or setbacks in the development or release of a new product. Consult with your insurance agent to understand what is and is not covered under your policy.
Misconception #3: “We do not have the time to develop a business continuity plan.”
Time spent developing and maintaining a business continuity plan is an investment in your company. Your fixed costs will continue after an event, whether or not you are open for business. The faster you can return your operations to normal, the more likely you will recover from the event successfully. With so much at stake, your company cannot afford to NOT have a plan.
Misconception #4: “Business continuity and disaster recovery planning are the same.”
Business continuity is a proactive plan to avoid and mitigate risks associated with the disruption of operations. It details steps to be taken before, during, and after an event to maintain the financial viability of an organization.
Disaster recovery is a reactive plan for responding after an event. It deals with the safety and restoration of critical personnel, locations, and operational procedures after a disaster, and is just a part of business continuity planning.
Think Your Business Can Withstand a Disaster? Think Again
Companies that proactively consider how to respond to events are often the first to get back to business, typically at the expense of competitors. A predefined business continuity plan, combined with the proper insurance coverage, maximizes the chance of a successful recovery by eliminating hasty decision-making under stressful conditions. It details how to get businesses back on track after a disruption – in the most thoughtful way possible.
According to disastersafety.org, 25% of businesses do not reopen following a major event…and it doesn’t even take a major catastrophe to shut down a business. In fact, seemingly minor disruptions compared to widespread natural disasters can often cause significant damage — power failures, broken water pipes, or loss of computer data.
Planning for a disruption or catastrophic event should happen when business is going well, not when disaster strikes. Having a pre-defined, well-documented business continuity plan that clearly communicates how your business will respond during an event can help mitigate risk — and is one of the best investments your company can make.
If you’re still not sure where to start with your business insurance and continuity planning, consider reaching out to The Feltner Group to set up a consultation to discuss your situation. We are here to help you protect your business, all while helping you get the coverage you need at the best rates possible.