A disaster can unfortunately strike at any time and affect any business of any size. Disasters can range from the more obvious such as a fire or flood, to the impact of a cyber-attack through to simple human error.
As disasters are unexpected, it’s not possible to plan for the timing but it is possible to plan for what to do if you were to suffer interruption to your normal business service.
Be aware of your risks
Carrying out a risk analysis will help you to identify where vulnerabilities may lie within your business and help identify the business areas which are critical to keeping your business running in the short term following a disaster.
It may also be useful to scenario plan a range of different disasters to help determine the impact they may have on your business
Have a plan for your whole business
Having the right small business insurance in place to protect you if the worst should happen is obviously of importance. But simply purchasing an insurance product shouldn’t be the end of your planning journey.
Look at implementing business continuity planning. Informed by your risk analysis, a business continuity plan will map out the processes and procedures that are needed to get all business areas functioning as soon as possible after a disaster. A business continuity plan can effectively compliment your insurance coverage ensuring that not only are you financially covered but that you and your staff know what to do in the event of a disaster.
Factor in time
Be realistic about the time it may take to recover from the impact of a disaster and make sure you factor this in to your planning as well as insurance needs.
It’s important to know your time sensitivities – how quickly you need your key business areas to be back up and running to maintain your business after a disaster. For example, if you rely on a website to drive sales how long could you manage if it suffered an outage.
Most businesses protect their physical assets, employees and members of the public with relevant insurance policies but don’t account for the impact that time can have on their resources. For example, you may suffer supply chain issues when getting back up and running, could you cover the costs of lost revenue if your business must shut after a disaster or recover from customers taking their business elsewhere in the meantime?
Recovery or simply getting back to functional often takes a lot longer than expected so time needs to be a major consideration to any small business when it comes to planning for business interruption.
Figures suggest that between 40% and 70% of small businesses fail to reopen after a major disaster, with the main reason quoted as being underinsurance. If you are unsure of how much business interruption cover your small business may require, Anthony Jones can work with your to provide a business interruption calculation and help minimise the risk of underinsurance.
