From fires to floods, earthquakes to hurricanes, disaster can strike anytime, anywhere, and often with little to no advance warning. According to the Insurance Information Institute, as many as 40% of businesses forced to suspend operations due to a natural or human-caused disaster never reopen their doors.
Your commercial property insurance policy would help you rebuild your physical infrastructure, but are you equipped to deal with lost revenue and mounting expenses while you work to restore operations?
Planning for the Worst
The difference between surviving a business interruption and going belly-up often hinges on one factor—preparation.
The best way to prevent a disaster from putting the future of your business at risk is to have a proper continuity plan in place.
Business Continuity Planning Steps:
- Defining potential risks
- Determining how risks will affect operations
- Implementing safeguards & procedures designed to mitigate risks
- Testing procedures to ensure they work
- Periodically reviewing the process to make sure that it is up to date
Start the process by establishing a planning team tasked with developing the continuity plan. Typical goals of your plan should include:
- Protecting the safety of employees, visitors, contractors and others at risk from hazards at the facility
- Maintaining customer service by minimizing interruptions or disruptions of business operations
- Protecting facilities, physical assets and electronic information
- Preventing environmental contamination
- Protecting your organization’s brand, image and reputation
The planning process should take an “all hazards” approach. The probability that a specific hazard will impact your business is hard to determine—that’s why it’s important to consider many different threats and hazards and the likelihood they will occur. A business impact analysis can predict the consequences of an interruption and give you a good idea of how your operations would be affected in case you were forced to temporarily close.
Implementing the plan means more than simply exercising the plan during an emergency. It means acting on recommendations made during the hazard analysis, integrating the plan into company operations, training employees and evaluating the plan on an ongoing basis.
It is important to conduct a formal audit of the entire plan at least once a year to help identify any factors that may necessitate changes, such as updated regulations or new hazards.
No business owner wants to think about what would happen to the business if disaster strikes, but it’s a reality that all business owners must face. It can be a daunting task to plan for a major business interruption—but it doesn’t have to be. Work with a risk control team who can guide you step by step throughout the planning process, from assessing hazards to implementing safeguards to ensuring your plan stays up-to-date.
We're Here to Help
If you have questions or concerns about your commercial property insurance or risk mitigation strategies, connect with a member of our team.