According to the Insurance Information Institute, as many as 40 per cent of businesses forced to suspend operations due to a natural or human-caused disaster never reopen their doors. Often a disaster comes quickly and without warning, so having a plan in place beforehand can make a big difference.
We normally think about the worst-case scenario when we think about disasters. Still it’s important to understand that even a relatively minor fire that forces you to shut down operations can carry many of the same challenges.
While your commercial property insurance policy would help you rebuild your physical infrastructure, are you equipped to deal with the loss in revenue and mounting expenses that will happen while you work to restore operations?
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 involves:
To get started, you should create a multi-functional planning team from across your business to ensure you have a good line of sight into all aspects of your operation. The planning process should take an “all-hazards” approach. The probability that a specific hazard will impact your business is hard to determine—so you should consider many different threats and hazards, along with the likelihood they will occur.
A business impact analysis, where your team determines and evaluates the potential effects of an interruption to critical business operations, can predict the consequences and give you a good idea of how you would be affected in case you were forced to temporarily close. Typical goals of your plan should include:
Implementing your plan involves more than simply exercising it 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.
Test the entire plan annually 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.
As a member of the Greater Kitchener Waterloo Chamber of Commerce, you have access to business insurance experts from Cowan Insurance Group. Our team can help, from assessing hazards to implementing safeguards, ensuring your plan stays up to date, and ensuring you have the coverage you need.
Learn more at cowangroup.ca/chamber.