From severe flooding to cyber-attacks to product liability lawsuits, businesses face endless risk exposures. Many owners and executives rely on a Business Owners Policy (BOP) or Commercial Package Policy (CPP), mistakenly believing they’re fully prepared for worst-case scenarios. However, insurance is just one aspect of a comprehensive business continuity plan.
Business continuity planning is a critical part of risk management, involving strategies for preventing and recovering from potential threats. Yet, it is often misunderstood.
Avoiding Common Misconceptions in Business Continuity Planning
Misconception: My team will know what to do in a crisis.
Truth: Crises are chaotic, and even experienced teams can struggle without a clear plan. Now is the time to establish a crisis plan, including step-by-step actions, stakeholder communication responsibilities (including media), and a temporary leadership succession plan.
Misconception: Insurance will cover our losses.
Truth: Insurance is crucial but not a standalone solution. General liability and commercial property policies may not cover all significant risks (e.g., floods, data breaches). Additionally, long-term impacts like lost customers and market share often go beyond what insurance can address. Work with an insurance expert to fill coverage gaps and understand remaining exposures.
Misconception: It’s too time-intensive to create a business continuity strategy.
Truth: Proactive planning saves time and resources later. Fixed costs like rent and payroll continue even if operations halt, and some burdens can be eased with policies like business income insurance. Furthermore, a continuity plan can minimize downtime, preventing customers from turning to competitors. Can you afford not to invest in your future?
Let’s Discuss Your Risk Exposures and Commercial Insurance Needs
At Swarts, Manning & Associates, we provide a unique perspective on all your commercial coverage options and help determine which carrier best fits your business needs. We strive to find you the broadest coverage at the best available rate. Give us a call to get started: (833) 878-2820.
Each week, Swarts, Manning & Associates covers relevant topics for your business. Stay tuned to hear more discussions about managing your insurance and industry-specific tips.
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