A successful business is one that is always prepared for the worst. In the past year alone, natural disasters cost businesses $280 billion, an all-time high. On top of this is the countless billions of dollars caused by accidents, crime, fires, and maintenance issues.
These costs and risks are known as business interruptions, and every manager should be prepared for them. Business interruption is far from inevitable, so here’s what you can do to reduce the risks.
1) Know What You’re Up Against
Did you know that so-called “acts of God” only make up a small fraction of business interruption claims? The vast majority of business interruption incidents are the result of human error, with fires taking the lead as the main cause of the disruption.
You should do your research and prepare for the types of business interruptions that are most likely to affect you. This could be local crime, flooding, pests, or anything in between. Once you know the risks you face, you can start mitigating them.
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2) Get Insured Against Business Interruption
There is no getting around this. Any business should have comprehensive business interruption insurance in 2022. No excuses. A quality small business insurance package should always cover the most common business interruption causes.
It should also cover your costs for lost business, lost salaries, and necessary repairs. If you do not have business interrupted insurance, get it now.
3) Have a Plan in Place
As our business interruption examples have demonstrated, you must be prepared for a diverse range of outcomes.
It is crucial that your company has a formal response policy in writing prior to a major incident or accident. This should cover exactly who on your team should be responding and what they should be doing.
It should also outline your insurance coverage and the main messages that you should communicate to customers, colleagues, and shareholders in the event of a major disruption to business operations.
4) Train Your Staff
Your staff is your most important asset, especially when it comes to risk mitigation. Everyone on your team should undergo regular safety training that is designed to reduce the biggest risks your company faces while also responding effectively.
This could include regular fire safety training, data management training, and security training. Simply keeping your team on the ball will mitigate a huge amount of the risks you face.
5) Prepare for Recovery
When disaster strikes, it can be difficult to look ahead to the future. However, you must prepare a rock-solid recovery plan in the event of such a disaster.
You must have formal processes written upon how your business should recover funds, repair reputational damage, and reassure investors in the event of a disaster. If the worst does happen, the best thing you can do is build back better.
Protect Your Business in 2022
All companies face business interruption and disruption. However, only the best companies effectively plan, mitigate, adapt, and recover. By preparing for business interruption, you can build a more resilient business in 2022 and beyond.
If you’re looking for more tips on how to future-proof your business against everything life throws at it, you have come to the right place. Make sure to consult our expertly-curated Security guides to learn more.