Business continuity planning is one of the most critical components of any recovery strategy.
The frequency and severity of weather-related events seem to be increasing. Reliance on a complex network of technology and supply chains is expanding. Both leave businesses susceptible to a variety of existing and emerging risks.
Managing these risks is key to the survival of any organization.
From Hurricane Sandy and 9/11 to the tornadoes in Oklahoma – companies that proactively consider how to respond to events are the first to get back to business, often at the expense of competitors.
A predefined business continuity plan, combined with the proper insurance coverage, maximizes the chance of a successful recovery by eliminating hasty decision-making under stressful conditions. It details how to get businesses back on track after a disruption – in the most thoughtful way possible.
Twenty-five percent of businesses do not reopen following a major event.1 It does not take a major catastrophe to shut down a business. In fact, seemingly minor disruptions compared to widespread natural disasters can often cause significant damage – power failures, broken water pipes, or loss of computer data.
A Travelers study found that 48 percent of small businesses are operating without any type of business continuity plan…Yet 95 percent indicated they felt they were prepared.
If you answered "Yes" to any of these questions, then your business continuity plan may be giving you a false sense of security.
In 2012, nine of the top 10 most expensive world-wide natural disasters happened in the United States. With $77 billion in insured losses worldwide, 2012 was the third costliest year on record. The first was 2011, when $126 billion in insured losses were reported.2
An alarming 48% of business owners surveyed by Travelers in 2012 said they have no plan in place. That means business continuity planning is more than smart business – it helps your company remain better positioned to recover from the business interruption, property damage, financial impact, and loss of life that a natural disaster or man-made event may cause.
Planning for a disruption or catastrophic event should happen when business is going well, not when disaster strikes. Having a pre-defined, well-documented business continuity plan that clearly communicates how your business will respond during an event can help mitigate risk – and is one of the best investments your company can make.
1Source: Insurance Institute of Business & Home Safety; http://www.disastersafety.org/
2Source: Insurance Journal; http://www.insurancejournal.com/news/national/2013/03/27/286235.htm
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