When it comes to a commercial business’ loss prevention strategy, the importance of having well-crafted tools designed to respond swiftly and effectively to unforeseen incidents cannot be overstated. One resource that may not get as much attention as it needs is a business interruption plan. Any loss, regardless of the severity or the cause, can potentially interrupt a commercial business. The scale and length of these interruptions can range from a full to partial shutdown, depending on the extent of the loss event.
As an integral part of an organization’s loss prevention strategy, a business continuity plan helps limit or mitigate downtime and the economic impact of disruptions after a loss. Whether fires, natural disasters, cyberattacks, or the breakdown of essential equipment, a well-structured business continuity plan ensures that a business can maintain essential functions during an unexpected event.
Not sure where to start? Whether you’re a broker looking to support your customer’s loss prevention journey, or a business owner interested in updating your existing continuity plan, consider the following key factors that contribute to building an effective business continuity plan:
In determining the plan’s scope, create a formalized outline of key management personnel and their roles and responsibilities when a loss occurs, as well as the areas that can be impacted.
Consult with third parties, such as an insurer’s loss prevention experts, as needed to fully understand an organization’s exposure.
Business continuity plans should be tested at regular intervals to ensure individuals know how to respond appropriately in their roles.
Practising a plan multiple times will make it more seamless and efficient should you suffer an actual loss.
Outline upstream and downstream exposures and ensure the business has secondary suppliers for critical raw materials.
Consider diversifying the business’ customer base. Business interruptions may cause some customers to look for alternative providers; broadening the customer base can help limit the loss.
Equipment that is critical to operations may produce a bottleneck in the event of a loss. Ensure there is an appropriate amount of critical spare parts available and assess alternative manufacturing options if possible.
Implement a regular backup process to protect electronic proprietary data and intellectual property. Ensuring your data is safe and redundant will help you resume operations quickly.
Organize pre-arranged service contracts to allow for a prompt response in the event of utility failure (e.g., electrical, heating/cooling, etc.).
For more information and additional loss prevention resources, visit echeloninsurance.ca.