If an unforeseen disaster causes your business facility to be temporarily unusable, such as that suffered by Primark recently when a devastating fire spread through its flagship Belfast store, it is vital your business is prepared and has completed secure Business Continuity Planning, says Diane Johnston, Head of SME at Autoline Insurance.
It could take months to repair or rebuild your premises, replace your stock, equipment or machinery. Along with this, it is crucial to consider the income you have lost during that period and the additional costs you incur securing temporary premises and equipment. Your property insurance will cover the tangible assets, such as the business premises, but what about the intangible loss of income? For this, you need business interruption cover.
Unfortunately, 75% of businesses fail within 3 years of a major disaster (Open Access BPO, 2018). However, the good news is that industry experts agree the best way to prepare your business to cope with a disaster is by having a robust business continuity plan in place.
Small companies are just as vulnerable as large corporations. Insight from Federal Emergency Management Agency has revealed more than 60% of small businesses currently do not have a formal emergency response plan. A business continuity plan, if implemented and maintained, could be the difference between successfully recovering from a business interruption and the more detrimental outcome of going out of business.
An effective business continuity plan should help you continue “business as usual” in the quickest possible time following an incident. It begins with identifying risks to your business from all angles including people, systems, physical assets and external risks before assessing the impact that those risks have on your business. You can then develop a recovery strategy and plan to minimise the impact of the risks. Once this is finalised, you should implement the plan followed by testing and maintenance on a continual basis.
Possessing a business insurance policy that incorporates business interruption is fundamental in ensuring that any interruptions are survived and don’t have a serious impact on your business.
Speak to your insurance broker to gain expert guidance on how to move your company forward in the most protected way possible, along with professional guidance to guarantee you are correctly insured, should the unexpected occur.