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27 Jun

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Why Your Business Needs a Continuity Plan and How to Prepare One

June 27, 2016 | By |

emergency-planA business continuity plan provides specific actions for a business to take when an unexpected event occurs that could potentially damage an organization’s financial health, reputation, or ability to compete in the market. According to a 2014 survey of midsize business conducted by The Hartford, while most companies have a business continuity plan in place, 33% of businesses have not documented their plan, and only 19% have tested their plan. These results indicate that most businesses are unprepared for a major unexpected event that could severely impact their bottom line and ability to recover after a disaster.

So, how does a business go about preparing a continuity plan? By breaking the process into manageable steps, and working on one portion of the plan at a time. While a continuity plan will look different for every organization, here is a 5 step process to developing a business continuity plan for your business to help you prepare for a disaster and recover quickly in the event that one occurs:

  1. Develop policy and organizational structure. Start by creating a business continuity plan purpose statement that details your reason for the plan and the objectives for the plan. Next, assemble a business continuity team within your organization and designate roles and responsibilities. Appoint a coordinator to lead the team and manage the plan.
  2. Conduct a business impact analysis. A business impact analysis helps to determine time-sensitive or critical business functions, and the resources needed to support them. Determine the people, places, suppliers, processes, and programs that are essential for your business to operate effectively.
  3. Identify major risks and assets for your organization. Some of the common risks faced by organizations today include natural disasters, malicious attacks, workplace violence, utility outage, system failure, fire, death of key employees, cyber attack, and mechanical failure. Assets that could be vulnerable to risk include people, property, supply chain, systems, equipment, information technology, business operations, reputation, regulatory requirements, contractual obligations, and environment.
  4. Determine and implement prevention and mitigation controls. Preventative measures help to prevent a disaster from happening in the first place. Some examples of preventative controls include installing fire and security alarms, using secure passwords and encryption, keeping business valuables in a secure location, and general housekeeping in the office to prevent injuries. Mitigation policies give direction for minimizing a loss that a business suffers and the interruption of business processes after an event. Mitigation controls should address emergency response, employee communication, public relations, and resource management.
  5. Prepare employees. Employees should understand their role in business continuity after a disaster. If an employee is expected to take action, they should be familiar with the plan prior to an event occurring. The plan should be tested to ensure that employees fully understand their role.
  6. Secure insurance to transfer risk. The risk of catastrophic events can be transferred through insurance. Talk with an insurance agent to discuss coverage that meets the exposures faced by your organization.
  7. Test the plan, review the plan and make changes as needed. Once the continuity plan has been developed, it should be tested prior to implementation. Once the plan is in place, it should be consistently monitored. The business environment is always changing, so it is essential to review the plan at least once per year. Additionally, the plan should be reviewed and changed as necessary when there is a change in staffing, processes, suppliers, or facilities.

By taking the time to develop a business continuity plan, you can prepare your organization for an unexpected event. Ultimately, your continuity plan could prevent disasters from occurring in the first place and help your business to recover more quickly should a disaster occur.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?