How resilient will your business be in the event of a disaster?
For business in the 21st century, the phrase “worst case scenario” has been redefined. Climate change is triggering severe weather events and wildfires that endanger facilities and employees. Add to that cyber breaches, pandemics, terrorist attacks, and even war and it’s clear that unprecedented events both global and local are threatening production and commerce as never before. Today, even a minor unforeseen engineering issue can cause devastating manufacturing consequences if supply chain problems delay a vital equipment part.
And disasters cause downtime — which can result in significant daily revenue losses. How long can your business afford to endure an interruption? And, how prepared is your business to withstand any one of many possible catastrophes — or to fully recover?
Extreme weather, global health crises, or equipment failures — whatever the potential threat, Chubb risk managers agree: to ensure business resiliency, you need to have a business continuity plan.
What is a business continuity plan?
Your business continuity plan (or BCP) is an individualized, documented series of actions to be taken when catastrophe strikes — whether that’s an emergency evacuation, a cyberbreach, or something else.
A BCP ensures that protocols, procedures, lists of contacts, and other resources are at your fingertips at a moment’s notice — it is designed to:
What are the benefits of having a business continuity plan?
It’s simple: planning = resiliency.
Companies that have a BCP in place have a much better chance of mitigating and surviving the effects of calamitous events on humans, facilities, and finances. It can help minimize dangers to employees; enable operations — and revenue — to continue; protect a company’s reputation and competitive advantage; and control recovery costs.
Creating a business continuity plan is a multi-faceted process that requires institutional attention and resources.
Business continuity planning in five steps
1. Develop a good foundation for your BCP
The following elements can help ensure you get your business continuity plan off to a good start:
2. Conduct risk assessment and mitigation planning
Your business operations are unique. It’s important, then, to identify and rank both general risks and the potentially ruinous hazards that are most likely to threaten your company’s resiliency.
Each potential threat will have its own considerations. For example, if a facility handles flammable materials or is in a geographic area with increased risk of tornadoes, then plant construction is important. If your business handles sensitive customer data, then cyber breaches are of utmost concern — and so forth.
After a thorough assessment, it’s time to make contingency plans to minimize the impact of your key risks. Depending on your needs, this can mean safeguarding a hardcopy data backup offsite, keeping a list of alternate vendors for critical parts, or having a process in place to move your entire operation.
3. Create emergency response procedures
What will you do when there’s an earthquake or a bomb threat? Before life- or health-threatening situations occur, have these key emergency protocols in place:
4. Outline your steps to recovery
Detail your company’s critical business functions and what will be required to restore such areas as sales, production, and operations to pre-disaster levels.
Make sure these steps are supported with a financial plan, including recovery budget requirements and a list of available assets (such as emergency funds, secured credit lines, and insurance policies).
5. Adopt a cycle of continuity planning
Neither your business nor its potential threats are static — so neither should be your BCP. Regularly review and update your plan.
Given the importance of comprehensive business continuity plans to a company’s post-disaster survival and recovery, the best time to develop a BCP was when you opened your business. The next best time is today.
For help with your business continuity analysis and planning, we offer a comprehensive Business Continuity Planning Guide — for more information, contact Chubb Risk Engineering Services. We provide risk management tools and resources geared to your specific, most up-to-date business hazards, such as: floods due to changing weather patterns; internet of things technology failures; or supply chain interruptions caused by more frequent and severe natural hazards, pandemics, and civil unrest. Proper planning and documentation of best practices can help ensure that your business will be resilient in the event of disaster.