How important is business continuity planning for commercial enterprises?

In today’s highly competitive and ever-changing business environment, businesses large and small face an unprecedented number of exposures that can disrupt business operations. Imagine a mid-sized manufacturing company that suddenly faces a catastrophic flood, crippling its operations. While direct property losses can be overwhelming enough, they often pale in comparison to the loss businesses experience if they are unable to resume operations following an event. Without a robust continuity plan in place, the impact could be devastating, resulting in lost revenue and tarnished reputation. Though no one can predict the future, it’s important to have a strategy and tools in place to address these potential scenarios and reduce damages to a business.

Understanding the intricacies of business continuity planning not only enhances the value insurers and brokers provide to customers but can also empower commercial customers to navigate potential interruptions with confidence. Unsure of where to begin when it comes to supporting your customers as they navigate continuity planning? Below is a summary of the key components that should be covered in an effective continuity strategy along with insight on the role insurers and brokers can play in helping businesses prepare for the unexpected.

Considered an integral part of a business’s overall risk management strategy, a business continuity plan is a pre-emptive plan to help a business ensure the continuous deliverance of goods and/or services to customers following an unforeseen disaster or event. This plan identifies potential threats and vulnerabilities, incorporating specific protocols that target critical aspects of operations to ensure businesses can respond to, and recover from an interruption to operations. This proactive approach builds resilience and helps protect businesses from the impact of the loss.

Though the components of a business continuity plan may differ between organizations, a common element across continuity plans is an incident response plan. An incident response plan is designed to prepare a business to respond quickly to unexpected incidents, ensure key personnel are well-prepared to respond to an incident promptly and efficiently, and reduce the overall operational impact. The following tools are used as part of an effective incident response plan:

1. Immediate response checklist outlines the initial actions to be taken following an incident. An effective checklist should be customized to an organization’s needs and document whether key actions took place, such as:  

• • The activation of an organization’s business continuity plan 

• • If applicable, whether an evacuation of the site took place following the incident 

• • Document whether local emergency response services were contacted 

• • Document whether the severity of the incident was assessed (i.e., damaged caused etc.) 

• • Confirmation that all staff were accounted for and briefed on the incident  

2. Emergency Contact List captures information about who to notify when an unexpected event occurs, and records the following:  

• • A list of key individuals, including their primary phone number, to contact in the event of an emergency 

• • Local emergency services phone numbers, including fire department, poison control, and alarm monitoring company (if applicable) 

• • Utility service provider phone numbers, including hydro, water, and local public works  

• • The organization’s insurance carrier information, including policy number(s) and claims department contact information 

It is important that these documents be reviewed regularly to ensure accuracy. To help brokers and commercial business owners get a head start on continuity planning, these templates are available through Echelon’s downloadable RiskIntel™ Business Continuity Planning Toolkit. 

Brokers and insurers play an important role in supporting their customers by providing tailored advice and resources to develop comprehensive business continuity plans that mitigate risks effectively. By leveraging an insurer’s loss prevention expertise, including available resources and tools, brokers can ensure their customers have access to the right support during challenging times, fostering a proactive approach to resilience and recovery. ™