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Businesses can be impacted by a wide variety of disasters such as severe weather, burst pipes, server failures, fires, and pandemics. Chubb risk managers advise that one of the best ways to make sure your business is prepared for recovery after a disaster is to develop a business continuity plan.

What Is a Business Continuity Plan?

A business continuity plan provides a framework for returning to normalcy following a disaster. It is a key tool in protecting business revenues, your company's reputation, recovery costs and even people’s lives. It generally covers the following key areas:

  • Disaster preparedness: A listing of the types of events that might hurt your business, how large a threat they pose, and how you can minimize their impact.
  • Emergency response: The procedures you’ll follow when a disaster is headed your way or has occurred.
  • Business recovery: A listing of your company’s critical business functions and the steps you’ll take to restore sales, production, and operations to pre-disaster levels.



Illustration of business people working on laptops

How to Develop Your Business Continuity Plan

All successful business continuity plans begin with commitment and support from top management, and a designated person responsible for overseeing the process. Here are some tips for creating your plan and keeping it up to date:
  1. Build a team. Get support from top management and designate someone to be responsible for overseeing the process. Then assemble a core team, with representatives from each critical business department, such as production, human resources, quality, finance, and other critical business areas.

  2. Assess the risk. Identify and rank the events or hazards that most likely threaten your business, including elements like facility construction, technology resources, staffing, past events, supply chain issues, specialized equipment, climate, security, and utilities.

  3. Develop a business impact analysis. This will rank your business functions from most to least critical, so you know which ones to restore first after a disaster. Ask your business units to recommend recovery strategies that will enable key functions to be up and running within a specified time frame. Include information on how to recover your backup data files (which should be stored offsite) within a few hours, and which IT vendor you’ll contact for replacement equipment, if needed.

  4. Put it in writing. Document your plan and procedures step by step. Make sure to share it with staff, and assign clear responsibilities for carrying out the plan.

  5. Test and retest. Think of business continuity planning as a cycle – one that requires continual reviews, updates, and adjustments based on changes to your business operations. Offer training sessions so your employees are prepared to collaborate in the recovery of the business, and conduct regular drills to assess and improve response.

    While the ideal time to put a business continuity plan in motion is before disaster strikes, even businesses that do not yet have a plan in place can invest time during the course of an event to protect their employees, assess the potential impact, and prepare for a smooth recovery.
This document is advisory in nature and is offered as a resource to be used together with your professional insurance advisors in maintaining a loss prevention program. It is an overview only, and is not intended as a substitute for consultation with your insurance broker, or for legal, engineering or other professional advice.

Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.chubb.com. Insurance provided by ACE American Insurance Company and its U.S. based Chubb underwriting company affiliates. All products may not be available in all states. This communication contains product summaries only. Coverage is subject to the language of the policies as actually issued. Surplus lines insurance sold only through licensed surplus lines producers. Chubb, 202 Hall's Mill Road, Whitehouse Station, NJ 08889-1600.