What Percent of Companies Dont Have a Business Continuity Plan

What to Include in a Business Continuity Plan

When disaster strikes, it's unlikely that your small business will get advance notice. It could be a weather-related event like a strong storm, a cyberattack, or even an outbreak like the recent coronavirus, COVID-19, that can have devastating effects on your organization. To ensure a successful recovery from these types of incidents, it's essential that small businesses create a business continuity plan.

What is a Business Continuity Plan?

A business continuity plan, or BCP, is a living document that outlines the procedures an organization should adhere to in the event of a major disruption or disaster. It can help protect the business's assets and employees, as well as allow them to remain competitive after a difficult event.

However, research shows that many small businesses do not invest time in business continuity planning. A recent report revealed that only 14.7% of companies had created a BCP. The most common reason for not building a plan was that these businesses simply don't have the necessary skills and knowledge to create one.

How to Create a Business Continuity Plan

Business continuity plans vary from company to company. Your plan should be tailored to your specific needs. A basic BCP includes:

• The scope and purpose of the plan
• Defined goals and objectives
• Key business areas and critical functions
• Designated emergency areas and escape routes
• Contact information for key personnel
• Risk mitigation plans

When creating a business continuity plan, there are seven steps businesses can take to proactively determine the specific risks facing their organizations and recover from a disruption in operations. These steps include:

1. Assess potential impacts. Understand what affect disasters can have on your business, such as damaged buildings, equipment and supplies, disrupted operations, lost sales, and regulatory fines that could be incurred.
2. Identify worst-case scenarios. Be prepared for the common natural or human-made disasters in your area, such as hurricanes, tornadoes, blizzards, earthquakes, cyber attacks, power outages and pandemics.
3. Determine how these various scenarios could impact your business. Think about how a disaster will impact your business operations, different departments of your company, the key equipment critical to operations, what the losses might be, and how you could mitigate these risks.
4. Rank your highest recovery priorities. Ask yourself what operations could suffer the greatest financially, operationally, or contractually, and decide was operations should be prioritzed in the recovery process.
5. Develop a business continuity plan. A detailed BCP should answer questions like who is responsible for carrying out critical business operations, what tasks are the most time sensitive, and what is needed to carry out these operations.
6. Make sure your plan is ready to go with training, testing and updating. All employees should be properly trained in the business continuity plan. It should be practiced and tested regularly to identify weaknesses and correct them, and then it should be updated as needed.
7. Create a recovery road map. Finally, make sure you have a recovery in place in addition to the BCP to ensure your business can get back on track. Know what third-party services might be needed, like contractors make necessary repairs or cybersecurity professionals to help restore data. Understand the long-term consequences of a business disruption, and how the company will deal with the anticipated costs and losses.

Business Continuity Planning and COVID-19

The coronavirus continues to spread across the world causing businesses to change the way they operate.

Jeff Corder, vice president of loss control at AmTrust Financial, suggests, "Now is the time to review your plans and keep employees vigilant in health and hygiene." Businesses should run through their current business continuity plans with both management and employees to identify any gaps that could occur because of staff members out of the office due to the virus.

"I recommend that companies start planning now and build contingencies to account for absenteeism and the slow spread of the virus because it will help their business in the long run," Corder says.

Business Continuity Planning for Small Businesses

No matter the size of your business, preparing for the unexpected is crucial to your ongoing success. The Insurance Institute for Business and Home Safety (IBHS) has created Open for Business-EZ (OFB-EZ™), a free, customizable toolkit to help small businesses prepare for any type of business interruption so they can reopen quickly following a disaster.

Creating the BCP is only the first step, however. Keep in mind your business is constantly changing, whether you're offering new products or services, expanding your staff, upgrading your technology, and so on. Anything that affects your business impacts your business continuity plan. It's imperative to update your BCP throughout the year, or at least every six months, to keep operations running smoothly following an unforeseen event that might close your doors for any length of time.

What should a business continuity plan include, and how can you keep it updated?

Here are a few tips to keep in mind:

Review and update current operations and plan details

Think about the risks facing your business and consider these questions:

• Have any risks or hazards changed?
• Have you added new products, services or employees?
• Have any primary contacts or suppliers changed?
• Are tools and software up to date?
• Do the details in your current BCP match your current operations?
• Are documents attached and updated?
• Have you added lessons learned from previous incidents?
• Have you reviewed your current insurance coverage with your agent?

Put the BCP plan into action

Update your business continuity plan as needed before distributing it to your team. Each employee should understand the role they play in the plan should an incident occur. Save both the digital and paper copies in a location all staff have access to and dispose of prior versions of the plans.

Test your business continuity plan regularly

Periodic testing of your BCP will help your organization recognize any gaps that need addressing. Corder says, "Plan for the worst and hope for the best, and it's not as simple as just writing a business continuity plan. You have to write it, and then you have to take it to the next level."

Testing for any potential weaknesses in your business continuity plan can include a variety of methods. For instance, use walk-through exercises with your staff to go over all parts of the plan, so everyone understands their responsibilities and whether or not the actions outlined are feasible. You could also consider testing using full-scale exercises that involve all employees rehearsing their roles in a real-life scenario.

Before implementing the testing exercises, make sure you have a basic outline of what you'll be looking for. This can include the parts of the BCP to test, the scope and objectives of the test, who needs to be involved, and how you'll document what worked well – and what areas need improvement.

Small Business Insurance Solutions from AmTrust Financial

AmTrust Financial underwrites over 350 class codes, making us an ideal fit for a variety of small businesses. Learn how our businessowners policy can help keep you focused on what's most important – the success of your company. Contact us today to learn more.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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Source: https://amtrustfinancial.com/blog/small-business/business-continuity-planning-small-businesses

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