Business continuity planning 101

A business continuity plan is a detailed strategy to help your business recover quickly from an unexpected shutdown.

According to the Federal Emergency Management Agency (FEMA), 25% of businesses never reopen after a disaster. A continuity plan—with processes and contingencies outlined relative to your business operations—is your blueprint to sustaining your employees, property, and assets if downtime occurs.

Here are four important steps to building an effective plan.

Completing a risk assessment is your first step in developing a plan for your critical functions and services. It helps you identify the probability of threats to your business and evaluates their impact if they were to occur.

Here are some common risks to consider:

• Cyberattacks

• Data breaches

• Crime

• Fire

• Flood/natural disasters

• Severe weather

• Transport disruption

As you consider those risks, don't only think about what happens in your business. Think about dependencies—suppliers, technology, utilities, transportation—whose issues could cause you serious problems.

A business impact analysis helps you pinpoint critical business functions and their financial impact on your business.

Start by evaluating the following factors of each business function you identify:

• Operational impacts

• Financial impacts

• Timing

• Duration

Understanding these factors can help you determine your recovery priorities and strategies. Use this impact analysis worksheet to organize your findings. Periodically review and update your impact analysis as the elements of your business evolve.

Outlining a clear response, whether the incident is a major disaster or temporary downtime, helps reduce the chances of post-incident miscommunication.

Make sure your continuity plan details emergency response, public relations, resource management, employee communications, and customer notifications.

Include the following directives in your response checklist:

• Roles and responsibilities

• Key personnel

• Updated emergency response contacts

• Internal and external communications plans

• Inventory and equipment checklists

• Locations of data backups and backup sites

• Backup site providers

Think of business continuity planning as a project that requires regular reviews and adjustments based on changes to your business operations. Test and update your plan annually—or any time critical functions, structures, or suppliers change.

Educate and train your employees so they understand their assigned roles and responsibilities. Consider doing dry runs of various disruption scenarios, especially when onboarding new employees.

If a shutdown does occur, assess and update your response when it’s fresh in your mind. Your goal is a quick recovery—a well-practiced plan can help make that happen.

Business insurance can play a large role in your recovery success. It’s important to make sure your insurance policy aligns with today’s evolving risks. Evaluate your current policy and have a conversation with your insurance provider about the following coverages:

• Commercial property can help cover buildings and greenhouses, equipment breakdowns, crops and inventory, and business income.

• General liability can help cover losses related to property damage to others, product issues, and chemical applications. It can also include cyber liability.

• Professional liability can help cover losses connected to the operation of your business. It includes employee benefits liability, cyber liability, and errors and omissions.

• Umbrella liability is an optional coverage that can help protect your business in the event of a catastrophic liability loss or a large judgment against you or your company.

Along with the standard coverages noted above, business interruption can help you recover lost business income, cover payroll, and even assist you if you have to move your business to a temporary location.

When your business is shut down, temporarily halted, or not producing at full capacity, you’re potentially losing money. Your business insurance coverages can be your lifeline during catastrophes.

Contact us today to learn more about business continuity planning and insurance coverages that can help you keep your business open.