Business-resilience

Business Continuity Plan – How’s Yours?

Fail to prepare, prepare to fail.

The last three years have taught businesses a lot about resilience. For many, the pandemic was a massive test for their business continuity plan while, for others, it was the reason they wished they had one.

Business interruption was placed firmly in the spotlight during the COVID-19 pandemic and many organisations experienced steep learning curves in working in ‘contingency mode’.

A quarter of businesses surveyed in February 2020 were only just developing their first ever business continuity plan…

Even though the risk of a global pandemic may not have been front of mind for business leaders when preparing a business continuity plan, organisations who had a defined plan in place had a basis from which to define their response. However, around a quarter of businesses surveyed in February 2020 were only just developing their first ever business continuity plan in response to the COVID-19 outbreak.

At that time, data also revealed that 95% of businesses said that they planned to assess whether it was necessary to revisit their enterprise risk management framework and continuity in light of the pandemic.

Risks going forward

When could the next pandemic happen? Or a less far-reaching catastrophe affect your business? The terms ‘once in a lifetime’ or ‘once in a century’ have been frequently used to refer to COVID-19. But, is this description accurate?

In July 2022, the Centre for Global Development (CGD), hosted an event on predicting the frequency and scale of future pandemics, with speakers from Metabiota, a company specialising in infectious disease research and preparedness. Metabiota’s research suggests that another pandemic may come sooner than we think. They estimate that the probability of future zoonotic diseases (diseases transmitted from animals to humans) resulting in a pandemic of COVID-19 magnitude or larger is between 2.5%-3.3% annually. This equates to a 22%-28% chance that such an outbreak will occur within the next 10 years, and a 47%-57% chance that it will occur within the next 25 years.

Of course, there are far more “localised” events that can reak havoc on your business – much as a major fire (electrical fires remain prevalent despite improvements in electrical safety and testing) and serious flooding from an increasingly erratic climate.

And even if your business is not directly affected, what impact might these types of events have on your supply chain (particularly if you have heavy dependence on one or two key suppliers) or major customers?

Why is business continuity management (BCM) so important?

It is not surprising that businesses of all sizes and across all sectors have been in survival mode for the last few years—tackling the challenges of Brexit, the pandemic, the knock-on effect of the war in Ukraine, and, for some, the impact of extreme weather events. However, this is also the time to be thinking about long-term resilience, and how your business can grow and thrive despite potential periods of disruption in the future.

An effective business continuity plan should provide a framework for incident management and decision-making, critical IT staff and networks that are ready to respond, and altered/alternative work spaces that can be quickly leveraged in the event of a crisis. It should also help you to re-evaluate your business interruption insurance against a backdrop of inflationary pressures, supply chain challenges and other risks.

Having a business continuity plan in place can reduce the amount of thinking time needed following an incident and can help contain and minimise the extent of the potential damage.

And here’s the really good news…

You can get this professional advice at a heavily subsidised cost – often free of charge as part of an ERA Insurance Procurement Services engagement.

An Insurance review by ERA is about sustainably reducing an organisation’s overall cost of risk – not just reducing premiums in the short term.

As such, we negotiate Bursary payments from Insurers to pay for the costs of BCM professionals helping our clients assess and mitigate their business interruption and continuity plans.

For more details, contact Paul Gravatt by email on pgravatt@expensereduction.com or by phone on 07860 780 770 or your regular ERA contact.