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A Good Business Interruption Plan Requires More Than Insurance – Are You Prepared?

December 10, 2012
Office building after California, Earthquake Oct. 17, 1989 (US Geological Survey)

Office building after California, Earthquake Oct. 17, 1989 (US Geological Survey)

According to the Insurance Information Institute, up to 40% of businesses that are forced to close by a natural or human-caused disaster never reopen. While Business Interruption Insurance is a vital part of getting back up and running after a disaster, it may not cover all of your needs. Luckily, there are many steps that businesses can take to help improve the odds of a full recovery after a serious business interruption.

Hopefully, you already have an emergency preparedness plan in place to keep employees and customers safe during a crisis. If not, check out for more information on writing and implementing an emergency preparedness plan for your organization. But what about the nuts and bolts of your day-to-day business operations? When writing a plan to deal with a potential business interruption, there are some important things to consider:

  • Is your vital data backed up in a secure location?
  • If a lynchpin employee is unable to work or communicate due to a disaster, is there someone else within the organization who can step in and preform their vital tasks?
  • What is your backup plan if communication systems are down? How will you get in touch with customers, employees, and stakeholders?
  • If your building is rendered uninhabitable, do you know how and where you will set up a temporary or permanent alternative location?
  • What if a disaster affects a key supplier of products, parts, or services? Do you have an alternative source available and in line? What are your suppliers’ business interruption plans?
  • Is your IT (information technology) backed up? This includes networks, servers, computers, and wireless devices.  Are you familiar with implementing manual workarounds?

Look for gaps in current policies and plans and make it a priority to close them. When writing your plan, account for a variety of scenarios, because there is no way of knowing what type of natural or human-caused disaster could affect you.  Be sure to define specific roles and responsibilities in your written plan and account for backup personnel in case an individual employee is unable to perform his or her assigned task. Once your plan is written and in place, make sure that all employees are adequately trained in the outlined procedures and that they know what is expected of them during and after the event.

According to a survey by the Ad Council, 62% of respondents said that they do not have an emergency plan in place for their business. Leave a comment and let us know what steps you’ve taken to ensure a speedy recovery from a business interruption.


Learn more about emergency preparedness and safety.


Article by: April LaRita Green

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