Integrating Business Continuity with Comprehensive Business Insurance

You've poured blood, sweat and tears into getting your business where it is today. Now that you're no longer operating out of your garage and crunching numbers on your couch, you feel confident enough to step back and consider how to safeguard your recent growth. To make sure your small business survives whatever the future throws at it, you'll need to develop a Business Continuity Plan. Explore what this plan should include and howBusiness Insurance coverage from 1st For Women will help you succeed in your business journey. 

What is a Business Continuity Plan, and why is it important?

Starting a business is like raising a child — no matter how many books you read and how much advice you get from others, nothing quite prepares you for the real thing. The first few years go by in a blur and if you survive this critical initial stage, you may wake up one day wondering when all this growth happened!

In the same manner that parents draw up a will or purchase life cover to care for their families, business owners can create a Business Continuity Plan (BCP) to help safeguard their enterprise. This will detail how your business can continue operating in the presence of certain risks, disruptions, emergencies or disasters. It's a useful tool for assessing your environment so you can identify possible future risks and how to handle them. The goal is to provide clear guidance on how to keep your business operational in the event of possible challenges.

4 key factors that a Business Continuity Plan should address

1. What risks will my business encounter in its day-to-day operations? Can I identify, understand, evaluate their impact and prioritise them?

2. What is the impact of a worst-case scenario? How can I help my business recover if this should happen?

3. What would I (or my next-in-command) need to do — step by step — if a crisis takes place in order to minimise loss and resume functioning as soon as possible?

4. Is there any training and testing I can offer my staff and stakeholders to prepare us better for these risks?

The role of Business Insurance in Business Continuity

While a Business Continuity Plan will outline valuable information your business can rely on in a crisis, it won't recover any financial damage it sustains should something interrupt your operations. This is why your plan should include Business Insurance

• Natural. Mother Nature rarely warns us before she strikes, so you need coverage for damage sustained from events like floods, hailstorms and fires.

• Accidents and incidents. Malfunctioning or broken equipment can force a business to shut down temporarily or indefinitely.

• Unforeseen Events. Service delivery issues or industrial action are some instances of events that could severely impact your daily operations. 

• Legal or regulatory changes. Legal changes can require hours of downtime and costly legal or accounting advice.

Business Insurance does so much more than recover the losses of time spent not working or repairs to essential equipment. Business Interruption Insurance, for instance, minimises your losses by providing compensation for lost revenue and allows you to keep functioning with minimal disruption. Having a good Business Insurance policy will also help build stakeholder relations. Clients, suppliers and customers will be confident in the fact that you have an action plan and the means to keep operations running. 

Successful Business Continuity examples

Here's how different businesses could benefit from Business Insurance:

Four years ago, Darla started baking and selling cakes from home. Today she runs a successful commercial bakery with four employees. She has created a Business Continuity Plan which includes her partnering with another bakery nearby so that if one can't fulfil their orders, the other will step in. 

Her plan highlights that with orders taken care of, the biggest impact of any disruption would be honouring her financial commitments. As her bakery is in a trendy suburb, rent is her highest cost, followed by staff salaries. She purchases a Comprehensive Small Business Insurance policy to cover all areas of identified risk. 

Unfortunately, Darla’s bakery experiences a major equipment malfunction, sending her production into serious downtime. Fortunately, she is able to meet her contractual obligations by handing over orders to her partner bakery. Business Interruption Insurance, which is part of her comprehensive insurance package, compensates her for the loss of revenue and assists in paying her rent and staff salaries. 

In the second scenario, imagine that Erik has been running an eCommerce business for several years, and his company is considered the best place to buy affordable hy outdoor equipment. Erik invests in keeping his website secure, but unfortunately, a hacker steals his passwords, accesses his database and obtains thousands of customers' credit card details.

Erikh the incident quickly but is still forced to shut his website down temporarily. However, when he purchased Business Inspan>coverage, he  added Public Liability Insurance which covers any third-party claims he may have to deal with should ad customer decide to take legal action against him for alleged negligence. 

Integrating continuity plans with Business Insurance

If sure how to draw up and use a successful Business Continuity Plan, here are some pointers to guide you in the right direction:

• First, identify and rank your business functions, employees, purchases and expenses from most to least important so you can determine what needs coverage and what level of cover is required.

• Take note of any unusual aspects of your business that may require specialised insurance. 

• Identify overlapping and dependencies between different departments and members of staff.

• Consider any savings you have, whether this could/would cover any costs and how long these funds would last.

• Imagine the worst-case scenario taking place — this will help you create plans to maintain operations, protect your employees, as well as decide which assets to keep or sell.

• Ensure that your insurance covers your specific risks. If you’re unsure, speak to a trained insurance broker for clarity. 

Get a Business Insurance quote from 1st for Women

Don’t resign yourself to the unexpected in business. Remember: if you fail to plan, you can plan to fail. Invest in Comprehensive Business Insurance that aligns with your Business Continuity Plan. To customise your insurance to match your unique business, apply for a Business Insurance quote online.