Help commercial clients formulate a business continuity plan

After a disaster: Is your client’s business continuity plan active?

This blogpost originally published in November 2016, as a checklist for insurance agencies in creating their own agency continuity plan. It’s been updated and rewritten here as helpful information for you to provide to your small-to-medium commercial clients.

Your small-to-medium commercial client has weathered multiple storms: Vendors who didn’t deliver. Employee mistakes that cost the company. Perhaps even a claim or two. But do they have a business continuity plan to help them weather true storms, the kind caused by Mother Nature? As their agent, you’re uniquely positioned to help them create their business continuity plan that includes emergency evacuation, employee safety, communication, protecting their property and more. No matter what Mother Nature throws at them – an earthquake, a flood or even a volcano that just won’t quit spewing, they’ll be better able to keep going, with business as usual.

Why is a business continuity plan important?

Here are just three good reasons: One, 40 percent of businesses affected by a natural or human-caused disaster never reopen, says FEMA. Two, your client’s customers expect them to be open and operating. Otherwise, they’ll take their business elsewhere. Three, your clients will assume that since they’ve worked through all the necessary coverage with you, that’s all they need to do. They may not realize that some strategic planning ahead of time will save them money – and time.

Related: Steps to Creating an Effective Loss Control Program

What should a business continuity plan include?

Each plan needs to consider

How they will protect the safety of employees and clients, should the emergency happen during business hours
How they will communicate with employees, clients, vendors and industry partners
How they will maintain their level of service by minimizing business disruptions
How they will protect their building, inventory, equipment, computers and digital information
How they will protect their company’s image and reputation

How to get started

First, help them make a list of all hazards that might take place: black-outs, winter storms, theft and vandalism, earthquakes, tornadoes, hurricanes, fire, cyber attack, or a prolonged absence of key personnel, for instance. Next, add to the list all of their vulnerabilities, from their staff, inventory, equipment and physical office, to their files and information technology. Third, help them analyze the impact of these occurrences on their business with a business impact analysis (BIA). FEMA has a worksheet that you can use.

Life safety is priority one when an emergency occurs, followed closely by stabilizing the incident and minimizing potential damage. A business continuity plan should provide for first aid and CPR training to employees that they’ve identified and trained beforehand, to help minimize injury and possibly even save lives. Making sure everyone knows where fire extinguishers are located, and how to use them, can extinguish a small fire. Training everyone where the best places for safety are in the event of a tornado or earthquake is also essential.

Many severe weather events can be forecast at least a few hours ahead of their impact, providing valuable time to enact an emergency plan. Now’s the time for your client to finalize and communicate their plan complete with resources that are either on hand or available quickly. Their plan needs to include processes for damage assessment, salvage, protection of undamaged property and cleanup. These actions will minimize further damage and business disruption.

They will need to have a clearly communicated plan for each potential incident, from fires to bomb threats (when and how to evacuate), to threats of violence or a nearby chemical spill (shelter inside the building).

How to communicate

An important aspect of preparedness is their crisis communications plan, enabling their company to respond promptly and confidently during an emergency within hours – and days to come. Have them make a list of the types of audiences with whom they’ll need to communicate, from employees to clients and from suppliers to claims personnel (and you, as their agent!). Additionally, their plan should include who will speak with news media personnel and the community at large – and what can or should not be said. Learn more about a crisis communications plan here.

Related: Safety tips for business recovery after a hurricane or other disaster

Additional resources

FEMA has a robust website full of worksheets, tools and other valuable information that can be of help:

Encourage your commercial insurance clients now to maintain business-as-usual, with a business continuity plan.