2025 September 15
As we emerge from another wild winter, the importance of business continuity planning is more evident than ever. Extreme weather events like flooding, landslips, and storm damage don't just affect homeowners; businesses suffer too.
Here are some essential tips for business continuity planning and what you need to consider regarding business interruption insurance.
A robust BCP is crucial to prevent minor disruptions from turning into catastrophes. It should cover not only natural disasters but also risks like supplier failure, economic crises, cyber-attacks, and pandemics.
Unprepared organisations risk losing profits, reputation, and even their entire business. The post-COVID-19 era showed us how many small businesses couldn’t survive the constant shutdowns.
BCPs help protect employees and assets, enabling a swift and controlled resumption of operations. They cover more than just immediate crisis procedures, such as safely escaping a fire; they outline how to get core business functions up and running again.
Key components include:
Testing the plan with a diverse group from across the business is vital. For example, what are the practical realities of switching phone systems from an IT perspective, or how do you communicate if no one has power? Risks are constantly evolving, so the plan needs regular reviews.
When reviewing your insurances, ensure your BI policy has the correct sum insured and indemnity period.
The indemnity period is the timeframe during which your business turnover could be affected by damage to buildings, plant, or contents. It should cover the period needed to restore your business income to its pre-loss position.
The Christchurch earthquakes highlighted how inadequate many indemnity periods were, as businesses underestimated the time needed to recover. Events like Cyclone Gabrielle and the Auckland storms were no different, with many businesses being grossly underinsured.
Business Interruption insurance should complement your BCP, as it will help provide funds to assist a business recovery. It is designed to cover the increased costs of working following a disaster and the loss of profit.
A good BCP will get the business up and operating more quickly, while a good Business Interruption policy will provide the funds to do so
Your broker can help ensure you are adequately covered if a major event strikes.
Please drop us a line if you would like our assistance.
insurance@icib.co.nz
0800 644 444
icib.co.nz