No company is immune to the effects or possibility of business interruption. It is how you plan and react to it that determines the impact. Risk assessments and hazard containment are part of a solid and reliable plan. But there is much more to it than that, so here are some handy tips.
Curate the Necessary Policies
Insurance is something no business can do without. It is a necessary expense that helps you more than it hinders. Of course, there is a cost. But with an honest business owners insurance claim, when something goes wrong, the compensation can help you get back in production quickly and effectively. It can also help keep your employees’ peace of mind by providing you with the means to pay them when they need it most, rather than having to let them go.
Perform a Risk Assessment
You can’t even begin to safeguard against hazards if you don’t assess where they can come from. There is risk in all sectors, and this comes in the form of environmental risk, human risk, and criminal activity. For example, the weather can damage your business. Or you can become the victim of attacks, such as the CNN newsroom in Atlanta in 2020. And then, of course, there is the omnipresent risk of becoming the victim of a well-planned and executed cyber attack.
Reduce Business Interruption with Contingency Budgets
Any kind of business interruption comes with a financial risk. Stopping production means you can’t do what you do to make money. So a risk assessment should be extended to evaluate any lost sales if something were to happen related to gaps in operation. You may also want to consider any penalties and fines that can incur as a result of business stoppage, such as not meeting contracts. These should then be factored into a contingency budget to cover the costs.
Identify and Contain Hazards
There are many potential hazards in any business. Some more than others, such as industrial, but they are always there. Fortunately, it is easier than you may think to mitigate the risk associated with hazards. It helps to first do a thorough inspection of your business and highlight where hazards are most likely to occur. Then you must take steps to prevent these hazards from occurring. And a proactive approach to safety will help contain or reduce hazards.
Develop a Plan for Emergencies
All your efforts for risk analysis and hazard prevention should be worked into a solid plan for emergency plans. First, there needs to be a reliable chain of communication for containing a situation. A well-established chain of command can help with this. It also helps to have procedures such as scripted communication, well-planned exit plans, and regular testing of any emergency plans. Regular fire drills are a perfect example and will help reduce risk.
Business interruption cannot be avoided. But you can reduce the effects of it with insurance policies, setting aside an emergency budget, and having a solid plan in place for emergencies.