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Business Continuity: Are you prepared?

We live in uncertain times. Extreme weather, floods, strikes, terrorism - it seems a day doesn’t go by without some issue, whether man-made or natural, occurring. So it’s no surprise that in a recent survey 68%* of brokers cited business continuity as an area of concern for their clients.

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Why so concerned?

Organisations without a business continuity programme are more likely to fail than those with one. According to information on the Business Continuity Institute’s website between 40% and 60% of businesses without a business continuity programme never re-open after a disaster, and 75% of organisations fail within 3 years after facing a disaster. Stark figures that speak volumes.  

business continuity stats

Managing business continuity risks make sense

Having a business continuity programme is good business practice and within the finance sector, a regulatory requirement. But business continuity should not just be viewed as an obligation - it’s also an opportunity.

Organisations with a continuity programme are not only more resilient but tend to be more agile and forward thinking than those without. The very nature of considering risk gets you thinking about the future. And the benefits of having an effective business continuity programme can stretch beyond the obvious of ensuring you can keep trading should the worst ever happen. 

Business continuity helps to build customer confidence, particularly in regulated markets, providing reassurance that whatever happens you’ll be there to support them. It can also determine whether or not you win new business, with many organisations taking a pro-active view and discounting those without a programme for fear of the consequences to them and their reputation. Along similar lines, business continuity is often an essential requirement for investors, as those without are seen as too risky. 

Other benefits can include: reduced costs through the identification of inefficiencies as you review processes and procedures; lower insurance premiums due to better risk management; preservation of brand value - the list goes on. 

The evolution of business continuity  

The approach to business continuity has evolved over the past decade. In the past, business continuity focused on impact reduction - what needed to be done after the fact. These days business continuity has become more aligned with general risk management principles and now also focuses on probability reduction – what can be done to minimise the probability of things going wrong in the first place, an approach we take here at Ecclesiastical. After all, prevention is better than cure. 

To this end, organisations should carry out a risk assessment to identify those business-as-usual processes carrying the greatest risk. The 4 main areas to consider are IT, buildings, supply chain and people.  Having identified the risks, the impact and probability can be assessed and the overall level of risk derived. A programme of ongoing activity can then be developed to manage the risk in the most effective and efficient way. 

The degree of complexity of the Business Continuity (BC) programme will depend on multiple factors including an organisation's size, its location, if it’s single or multi-site and even the type of business conducted. Ideally a named person should be responsible for the programme and business continuity driven from the top to ensure buy-in at all levels. It should consist of a policy statement, a strategy (including roles and responsibilities, timescales, budgets) and a list of the proactive controls (for example cross training, enhanced IT resilience, Information Security management) and reactive controls to be used (for example remote working capabilities, backup site, incident response and business resumption plans). It’s also vitally important that the BC programme is reviewed regularly to ensure it remains appropriate and includes relevant changes such as new activities, changes in supplier details, etc.

business continuity dominoes

A word of caution

For anyone thinking it’s still too much effort and the likelihood of an incident hitting their organisation slim, it’s worth remembering it’s not just big incidents that can have a big impact. 

In the not too distant past, an unfortunate event a short distance from our head office in Gloucester meant an emergency services exclusion zone was set up, limiting access. Fortunately, we were able to contact staff, enabling those who could work from home to do so and providing those who needed access an alternative route into the office. And in April this year, a burst water main in the city centre meant the toilets no longer worked, taps and drinks machines ran dry. The consequences could have been costly but fortunately we had plans in place, including a contract for portaloos so the office could remain open and staff to continue working.

Further help and information

Due to the number of variables business continuity can seem a daunting task. But don’t worry, with their first-hand knowledge of your business, systems and premises, your staff are a great source of information. 

If you do not have the necessary risk management expertise in-house to collate and formulate your BC programme, there are a number of options available – using BC consultants is one. A list of qualified business continuity consultants can be found on the Business Continuity Institute’s website. The BCI’s website is also a great source of information and training.  

In addition, advice on developing appropriate levels of resilience within the IT environment can be found at Get Safe Online.

Supporting our customers 

“Our claims function, supports many organisations every year - large and small - in the traumatic aftermath of an interruption event. Without question, it’s those customers who have an organised and planned response to such events who recover most speedily and completely from the interruption. A practical, easily accessible and easy to follow, up to date and tested Business Continuity Plan (BCP) will ensure an organisation is best placed to recover from a loss and/or unexpected event and to resume operations in an efficient and effective manner,” states Mark Matthews, Risk Management Director, Ecclesiastical Insurance.

Ecclesiastical’s in-house team of Risk Management surveyors includes business continuity specialists who can support customers in either developing new or reviewing existing BC plans. We have also produced guidance material, including templates, to help customers create their own emergency and longer term recovery response plans.

For further advice, Ecclesiastical customers can contact our Risk Management Advice Line on 0345 600 7531 or via email at risk.advice@ecclesiastical.com

A free software package called ROBUST is also available from RISCAuthority, a funded research facility supported by a significant group of UK insurers, including Ecclesiastical. This is a comprehensive toolkit with all the details of how to complete a BC plan.

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* Ecclesiastical research carried out by FWD Research, December 2016. 

This article is provided for information purposes and is general and educational in nature. You are free to choose whether or not to use it and it should not be considered a substitute for seeking professional help in specific circumstances. Accordingly, Ecclesiastical Insurance Office plc and its subsidiaries shall not be liable for any losses, damages, charges or expenses, whether direct, indirect, or consequential and howsoever arising, that you suffer or incur as a result of or in connection with your use or reliance on the information provided in this article except for those which cannot be excluded by law. Where this article contains links to other sites and resources provided by third parties, these links are provided for your information only. Ecclesiastical is not responsible for the contents of those sites or resources.  You acknowledge that over time the information provided in this article may become out of date and may not constitute best market practice.

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