Planning for the worst
by Coverzones

While the recent swine flu outbreak has not - yet - had the disastrous impact on British businesses that some predicted, there are plenty of unforeseen events that could cause businesses to struggle.

There are some estimates that 80 per cent of businesses with no business continuity plan fold in the aftermath of a major disaster. And while this could be something along the lines of a national emergency such as a terrorist attack or health epidemic, it could just as easily be something closer to home, for example the incapacity of a key member of the business. Or it could be something as simple - yet damaging - as a strike leaving you out of contact with your customers.

Putting a plan in place can not only help you arrange procedures for dealing with emergencies; it also provides a step-by-step guide for individuals to follow when they may be finding it difficult to make decisions - giving them a route to follow will help them work through the crisis.

"By developing a simple plan, a business continuity plan, you can protect your business to ensure that no matter what disaster strikes you are prepared and 'business as usual' is the only thing your customers and suppliers see," says Colin Ive from SME Continuity.

Your first step, according to the Contingency Planning and Disaster Recovery Guide, is to prepare a list of all the potentially serious events that could happen. This doesn't necessarily mean listing all the disasters that could befall you, but looking at the issues that would affect your business. So instead of listing swine flu, ebola or any other illness, the list would include something along the lines of staff shortages or key person unavailability.

For each potential issue, you need to come up with a process to follow - the key people involved, any suppliers that need to be contacted, a list of contractors who may be able to support you and, vitally, any insurance policies you can claim on.

While business insurance won't be able to completely prevent any effects of a disaster, it can help to mitigate any costs you may incur. Key Man Insurance can provide a cash injection into a business in the event of the untimely death or incapacity of a specified member of staff. The funds can be used to offset any loss of revenue caused by that person's absence, or to recruit or train a new person in that position.

If your business is hit hard, and has to stop trading for a short period, Business Interruption insurance can help to tide you over. It's a short term solution for a few weeks and is there specifically for if you have to stop trading due to factors outside your control - it doesn't cover a downturn in trading conditions.

If the emergency is a bit closer to home, employers' liability and public liability insurance will protect you from claims for issues that arise on your premises. We live in a culture of litigation and if an injury or damage could be found to be your responsibility, then expect a hefty bill.

By planning ahead, and facing the risks to your business head on, you can prepare for the worst. It could make the difference between survival and failure for your business.

Coverzones are a small business insurance comparison website, they offer the ability to compare, choose and buy policies online. They offer professional indemnity (PI) insurance as well as liability insurance and commercial property insurance.