Super-storm Sandy, hurricanes, Ebola, influenza epidemics, product malfunctions or any event that may negatively affect a company's health, image or productivity call for a business contingency plan. Risk Management should certainly be a concern for all business owners to ensure the continuance of your business operations even under the most unfavorable conditions. Here are some scenarios to consider:
- An interruption in your business operations can happen even if there is no physical damage to the property. Note that in order to trigger the business interruption coverage, there must first be damage to the property from a peril defined in the policy. Thus, without physical damage, recoveries are not “a given” and, therefore, contingency planning is an imperative to keep the doors open and business flowing.
- What type of plan do you have in place if your employees are unable to get to your physical workspace, or if the workspace becomes uninhabitable? Can your employees work from home? Do you have an alternate remote location in place?
- What about reputational damages? In today’s world of news coverage being dispersed worldwide in an instant, media spin can turn an unfortunate occurrence into a full blown crisis in no time. A planned response, trained spokespersons, and crisis intervention is certainly well worth the cost. An example, are the recent cyber-attacks suffered by major retailers. Remember that reputation and good will are extremely important, and there are insurance policies that provide coverage for reputational damages.
- Reliance on government doesn’t always line up with the objectives of privately owned and operated businesses. While it is important to follow governmental directives in a crisis, it is also necessary to ask questions and not just blindly follow along.
- As was recently seen in the Ebola crisis, healthcare systems such as hospitals are not failsafe regardless of how top notch their rating might be. Don’t rely on them to bail you out in case of such a crisis.
In our office we have Team Leaders who are ready to swing into action and implement our very detailed continuity plan so that we can remain operational to our clients if anything were to ever happen. You should too!
Karen Skoler, CPCU