In simple terms, a business continuity plan is a document or set of documents that clearly set out the steps to take to ensure you can continue to work if an unforeseen incident disrupts or prevents access to the resources your business needs to operate normally.1
Why is a Business Continuity Plan Important?
However unlikely it might seem, there are wide range of incidents that could prevent you from working normally, or at all – from disasters like fire or flood affecting your office, to loss or theft of vital equipment, or an accident or illness leaving you unable to work.2
So, having a clear plan in place as to how you will deal with those incidents, to minimise disruption, could be vital to protecting your finances – ensuring you can continue to work, and earn, and minimising the chances your customers will go elsewhere while you are out of action.2
How to Write a Business Continuity Plan
There are a number of components to a business continuity plan. It should set out the elements of your business that are ‘mission critical’ – those you would not be able to work normally without – look at the kinds of incidents that could leave them unavailable, and set out a clear plan designed to help you get back to normal if the worst should happen.
Some key risks to consider are:3
- Property: What would happen if your premises were affected by a serious incident like fire or flood? Would you be able to continue working, what steps could you take to get back to normal, and how long might it take?
- Tools: Consider the tools you need to carry out work for customers, and the impact on your business if they were stolen, damaged, or lost. Could you replace them quickly and what might it cost?
- Vehicles: What if your business vehicle is stolen, or off the road for a period of time? Again, think about how you might be able to deal with this issue, for instance through a temporary vehicle hire – but also how quickly you might be able to do so, what it might cost.
- Computer equipment: As a contractor, you may well have a computer (or a smartphone) to generate and store quotes and invoices, manage your business accounts, communicate with customers, and store customer contact details. So you need to think carefully about the risks that could leave equipment unavailable – from theft, loss, or damage to cyber incidents like hacking and viruses – and how you will recover if the worst happens.
- People: What if you suffered an accident, or fell ill and were unable to work, or a similar incident befell a key member of staff? Would the business be able to cope during that absence and what would be the impact on your finances?
Clearly, every contractor is different, so the risks you face in any of the areas above, how you can respond and recover, and how quickly, will be individual to you.
So it is important to take the time to think about your own worst case scenarios, build a contractors’ business continuity plan that is specific to you, and test it to iron out any problems – after all, you don’t want to discover holes in your plan when you really need it.2
Business Continuity Planning and Insurance
Finally, it is important to review all your business insurance cover as part of the business continuity planning process – to see how it might helping you recover from an incident quickly, and to identify any gaps in your cover.
For instance, think about:
- Property insurance: Look in particular at how your property insurance might help you recover after a serious incident. Does it include cover for temporary premises while your usual base is unavailable?
- Commercial vehicle or fleet insurance: Similarly, does your cover here contribute to your business continuity plan – for instance by covering the cost of a temporary replacement vehicle?
- Tools cover: Make sure your tools insurance offers enough cover to replace vital tools without leaving you out of pocket.
- Computer insurance: Check whether any computers and smartphones you need for work are covered under your property insurance and how quickly that might enable you to replace them. It may also be worth considering a cyber insurance policy to help you react and recover if your computer systems are attacked by hackers or other cyber criminals.
- Personal accident insurance: If you were to suffer a serious accident, or were unable to work due to injury or illness, personal accident insurance could step in pay a lump sum or help replace monthly income.
- Business interruption cover: This is a type of insurance that can help to cover the loss of income that a business suffers after a disaster – if you buy your business premises insurance from NICEIC Insurance, this cover will be included in your policy.
So, all these insurance covers, and more, may offer features that help to support your business through a crisis, and should certainly be included in your business continuity plan – along with all the details you need to make a claim if the worst should happen.
But it is important to check the detail too. Check whether your business insurance policies offer enough cover – because under-insurance could leave you out of pocket if the time comes to make a claim. Similarly, look carefully at any policy excesses you might need to pay and then factor these costs into your business continuity plan.
Business Continuity Planning: Help is at Hand
Finally, remember that business continuity planning for contractors can be a detailed, time consuming process. So, if you need help, whether to identify the risks facing your business or to review your insurance arrangements, the expert, friendly team at NICEIC Insurance is here to help - simply get in touch to arrange your FREE, no obligation insurance health check.
Julianna Forsyth, Senior Vice President for Marsh Commercial Risk Management
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