The 3-Pronged Approach to Catastrophe Risk Management

With windstorms and wildfires already threatening and the hurricane season looking to be a busy one, now’s a good a time to remind your clients about how to manage the risk of catastrophes.

Here are tips and other resources that you can share with your clients and prospects to help them prepare their offices or business facilities before an event — as well as key steps to take afterward.

Five Steps to Executing a Business Continuity Planhurricane ahead sign

  1. Build Your Team. All successful business continuity plans are built from the top down. Begin with commitment and support from top management. Assign a designated person responsible for overseeing the process. Then assemble a core team of individuals that represents every critical business department.
  2. Assess the Risk. Identify and rank the types of events or hazards most likely to threaten your business. These may include facility construction, fire protection, technology resources, staffing, past events, supply chain, specialized equipment, climate, security and utilities.
  3. Analyze the Business. Develop a business impact analysis (BIA) that ranks functions from highly critical to important so that you can recover the most critical functions first and then, over time, restore all business processes. Once the critical functions have been identified, business units should recommend strategies that allow for the recovery of functions within a prescribed time frame known as recovery time objectives (RTO). Backup data files should be stored offsite and accessible within a few hours. Ask your IT vendor if it offers a service to ship you replacement equipment quickly after a disaster.
  4. Document the Plan. It’s important to document the plan and procedures step-by-step. If you don’t have business continuity planning software, most plans can be written using basic word-processing programs.
  5. Test the Plan. To verify that your choices for recovery strategies are valid, regular testing is essential. These tests may be a simple exercise in which the staff discusses the steps required to respond to a disaster scenario. This is a great opportunity to determine what won’t work as well as what will. Remember, business continuity planning is a cycle that requires continual reviews, updates and adjustments based on changes to your business operations. This may appear time-consuming and costly, but the investment is essential to maintaining a comprehensive, effective plan.
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