The Business Continuity Plan: Don't Be Caught Without One
Thousands of businesses each year have their operations interrupted by a number of different causes. These include natural disasters, emergencies, floods and fires. There are approximately 6,000 office fires alone each year, part of 90,000 non-residential structural fires.
Additional risks to businesses today rest in the loss of digital files and records from a failure of or attack on IT resources. Even if the total physical damage from a disaster is limited, it can cause a total shutdown if a company's computers are damaged or destroyed.
The statistics vary widely concerning the total number of businesses that never reopen after such an interruption of operations. However, the most conservative estimate of 25 percent comes from the Small Business Administration. The longer the shutdown a company has to endure, the greater the probability of its failing. If you are a business owner or manager, it is essential to develop plans to keep your firm out of those statistics.
Proactive Planning is a Must
Many companies, large and small, feel they have addressed the issue of business continuity with an IT backup and disaster recovery plan. However, studies and recent experiences show that today's business environment requires a more through and disciplined approach.
A number of IT firms, consultants and insurance agents now specialize in this field. They work with company management teams to evaluate, develop, publish, and regularly update business continuity plans that cover as many situations as possible. Best practices also call for these plans to be reviewed regularly, including running drills and mock recoveries.
Since digital records and data are at the heart of most businesses, these receive priority in planning processes. However, effective planning deals with a wide spectrum of other issues. Anything affecting the ability to resume operations quickly after the unexpected occurs has to be addressed. This includes:
- Establishing a clear chain-of-command for implementation during a disaster
- Constantly refreshing off-site backup of current files
- Arranging for contingent remote operations capacity for employees and warehousing
- Maintaining an updated 24/7 call up plan for key personnel
- Developing a call center contingency plan to handle employees, customers and the press as necessary
- Covering all necessary actions and communications related to insurance claims, banking activities, vendors, and other supply chain requirements
- Ensuring any Environmental Protection Agency issues are anticipated.
While the required planning may seem overwhelming, there are a number of checklists and manuals available to highlight the many details of a properly prepared business continuity plan. Your insurance agency and agent will also have excellent insights into the process. Like insurance itself, having such a plan may seem to be another nuisance and expense, but it will prove itself priceless if and when needed.