It’s another normal day in the office until the fire alarm goes off. Downstairs, waiting for the fire brigade to arrive and watching the smoke curl out from the windows, you suddenly have a terrible thought – what does this mean for your business?
Although, thankfully, everyone is out of the building safely, you’re starting to add up the potential costs with panic. If the shared drive is damaged then there’s no other backup of the files – what will you do then?
What will happen if the equipment is damaged? Will your buildings insurance cover that? And what on earth are you going to do if the office is damaged? Where will your employees go each day? How much money could an unforeseen disaster like this cost, and how will your business survive the quickly mounting costs?
If you’re hit by a disaster that leads to unplanned downtime for your business then you can put a plan in place to help you prepare for any potential costs, from storing your data in the cloud to taking out business interruption insurance.
Prepare for the worst
What’s the worst that could happen? Flood? Fire? A gas leak? How would your business be affected if you had to have several weeks, or even months of downtime? What would the cost be to make any necessary repairs, and how much would the deficit, caused by the interruption of your business activity, be?
Many businesses actually go under if they don’t have the right plans in place when they’re hit by disaster such as flooding, so it’s important that you prepare.
Come up with a plan
Planning is essential. Have a contingency plan in place addressing how you will communicate with staff and customers in various situations. The key to dealing effectively with an emergency situation is communication, in particular when you are a client-based business and your profit is drawn in by just a few stakeholders. To what extent will you be able to keep things running, and what measures can you implement to help tide you through if something does go wrong?
Come up with a contingency plan for every eventuality. If your office was out of order, would staff work from home? Who would oversee the assessment of the damage to the building? Could you get an insurance policy put in place to help protect you from this kind of risk? It’s all about anticipating and preparing – planning is vital.
One way to help lean towards business continuity could be moving towards a cloud-based system both for file storage and software as a service (SaaS).
The Cloud – what is it?
The forecast for cloud storage has been bright in recent years – year on year the use of private cloud adoption has increased from 63% to 77%.
Simply put, the cloud is just a metaphor for the internet, and cloud technology just means accessing data and programs via the internet rather than relying on the hard drive of your PC.
The Cloud – how can it help?
The use of this technology can help aid your disaster recovery plans in two ways:
A cheaper back-up
You can use the cloud to back-up your files, so that if something does happen to your internal storage system, it won’t be costly to fix.
Accessible from anywhere
Previously files and software would have only been available from the office, but now you can have the freedom to access them from anywhere. This means your employees would still be able to work from home as long as they were connected to the net. Software as a Service packages mean that alongside files, you could also access programs via the internet.
A double-edged sword?
Computer Weekly comments that, ‘the jury is still out on whether using cloud-based services increases or decreases the likelihood of business interruptions’.
By storing you data on the cloud you are potentially putting yourself at risk of cyber attack. It’s also worth noting that if your business has suffered a setback, and you are relying on the cloud, the cloud could then suffer technical issues, which would affect your business.
However, according to RightScale, lack of expertise, rather than security is now the biggest cloud challenge, meaning that the need for upskilling is a more pressing issue.
Business interruption insurance
As well as cloud storage, business interruption can be a great way to help limit the implications of unforeseen circumstances on your business.
Business interruption insurance covers the loss of profit your business might have due to unforeseen circumstances. This not only covers your lost profit margins, but temporary expenditures you might make to try to manage the circumstances, such as purchasing new equipment or renting a new office.
Businesses which do not have business interruption insurance that befall flooding or storm damage, for example, often have to cease trading because they can’t deal with the financial implications of the disaster.
For a free review of your business interruption insurance, please contact the Chartered brokers at Hine Insurance.