Just last month, Hurricane Beryl made landfall in Texas as a Category 1 hurricane, causing catastrophic damage to homes and infrastructure. The storm caused widespread property destruction, prolonged power outages and significant economic disruption throughout these areas.
As we have seen with Hurricane Beryl and countless other storms, particularly in coastal areas, weather events can cause extensive halts to business operations and massive financial losses.
With the unpredictable nature of these weather events, planning for business recovery is critical.
Two of the most important things a business can do are: create a Business Continuity Plan and include Business Interruption Insurance as part of that plan.
Keep reading for our business continuity FAQ:
What is a Business Continuity Plan?
A business continuity plan establishes a framework for an organization to limit its losses in the event of a disaster or emergency.
Who needs a Business Continuity Plan?
Organizations of all sizes and industries, especially small businesses, need a Business Continuity Plan. Smaller organizations can have a more challenging time recovering from a single event.
What are the goals of a Business Continuity Plan?
- Continue delivery of services and products
- Keep employees and patrons safe
- Minimize damage to property, data and other infrastructure
- Maintain access to resources, such as equipment and technology, needed to perform essential functions
- Preserve clear communication with all relevant stakeholders
What can a Business Continuity Plan include?
- Disaster Recovery Plan (DRP) – This plan section focuses on technology’s operational continuity. It covers how data will be protected and preserved to protect stakeholder information and private business files.
- Crisis Management Plan (CMP) – A CMP provides an organization with benchmarks to determine if a disaster has occurred. It provides a standard for activating the entire BCP and establishes a chain of command during emergencies.
- Emergency Response Plan (ERP) – This plan helps an organization take steps to mitigate the immediate challenges of a disaster. Its focus is keeping employees, customers and property safe. It also sets prompt remediation protocols.
- Business Interruption Insurance – Take a deeper dive into this below!
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What is Business Interruption Insurance?
Business Interruption Insurance offers financial protection when an organization’s usual business functions are interrupted due to a covered loss.
What does Business Interruption Insurance cover?
- Income that an organization would be earning if it were running normally
- Commercial mortgage, rent, lease, loan and tax payments due during a disruption
- Payroll expenses to maintain employees’ wages amid a closure
Who needs Business Interruption Insurance?
Business Interruption Insurance is an essential protection for any business that operates a physical location, such as restaurants, stores, salons or workout studios. It’s also necessary for companies that rely on equipment or machinery that could be affected.
What are some examples of covered business interruptions?
- Fires
- Theft
- Vandalism
- Some kinds of adverse weather, such as heavy wind or hail
- Falling objects
- Lightning
Resources
Find further guidance and reading below:
- Business Continuity Planning Guide
- Business Recovery Checklist
- The Value of Business Interruption Insurance
You can also reach out to our team for further guidance on creating your own Business Continuity Plan. Click HERE to get started.
Sources
Zywave (Business Continuity Planning Guide)
Zywave (The Value of Business Interruption Insurance)
AP News (AP PHOTOS: From the Caribbean to Texas, Hurricane Beryl leaves a trail of destruction)
