Posted on: 10 August 2018

Preparing for that ‘just in case’ scenario

Running a business is hard work from the word go. Planning takes time, setting up can be costly and building up a client base from scratch can take a lot of effort. While no one ever thinks the worst will happen, it’s best to be prepared, just in case. When it comes to business continuity, it isn’t just about insurance, being proactive rather than reactive could help your business weather the storm.

Major economic change over the past decade has moulded attitudes towards business continuity and disaster recovery. In 2011, riots hit many parts of the UK costing insurers around £200 million in damages paid out to individuals and businesses; large scale flooding has affected thousands of personal and commercial properties across the UK and more recently the potential political and economic impact of Brexit have forced all sorts of businesses to address the big question….what if?

Of course, it won’t always be a national disaster or threat that could have the potential to take down a business. More recent issues have seen organisations large and small hit by ransomware and other debilitating cyber-attacks even a fire spreading from a neighbouring premises could have devastating effects in a matter of minutes.

Whatever type of business you run; continuity planning boosts your strength and stability. Not only does this give you an edge in a competitive environment, it also demonstrates your commitment to keeping your clients at the forefront of your business.

Whatever your business encounters, having a business continuity plan in place could be the life ring that keeps you afloat because not every risk you face can be insured. By evaluating the threats you can prepare for that ‘just in case’ scenario. We’ve put together a few hints and tips to help get you started in building your business continuity plan.

What’s the worst that could happen?


According to a study from NFU mutual, 80% of businesses either never reopen or fail within 18 months of a major fire incident.

Possibly one of the most devastating events that any business could suffer, fire has the potential to completely destroy premises in just a few minutes. Fire can start unexpectedly due to faulty electrics, cooking processes, unextinguished cigarettes, or could even spread from a neighbouring building. Regularly assessing the fire risk to your business and having the right fire detection and prevention equipment can help to minimise the disruption should something happen. Fire risk assessments should be done regularly, as well as testing the fire alarm and conducting fire drills.

What could cause a fire?

  • Arson
  • Candles left unattended
  • Gas leaks and chemical spillages
  • Electrical faults – appliances and hard wiring
  • Fireworks and bonfires
  • Lightning and extreme weather
  • Smoking materials

Reduce the risk:

  • Install fire alarms and smoke detectors and test them weekly
  • Make sure you have  fire extinguishing equipment which is well maintained, there are companies that will do this under contract
  • Conduct risk assessments, fire safety training and drills to ensure everyone knows what to do in the event of an emergency

Extreme weather

Accountancy firm KPMG has estimated that the total cost to the UK’s insurance sector, businesses, individuals, communities and government as a result of winter 2015/16 flooding will top out at between £5-5.8bn.

Recent years have shown just how unpredictable UK weather can be. Storms, floods and high winds can affect homes and businesses, cause power outages and delay transport. Severe weather can also cause damage to roads and bridges and even building foundations, meaning the impact on your business could be long term.

The best that you can do to prepare is look at every possibility and prepare a plan of action. Having a disaster kit with supplies ready for each eventuality can help you prepare to batten down the hatches against the effects of extreme weather.

Extreme weather may include:

  • Heavy rainfall
  • Flash flooding
  • Winter storms
  • Strong winds
  • Heatwaves
  • Ice and snow
  • Humidity

Reduce the risk:

  • Regular maintenance checks of your premises
  • Prepare an emergency kit – you never know when you might need it
  • Be sure you could work from home if necessary
  • Avoid travelling in extreme weather conditions unless it is absolutely necessary


Cyber-attacks come in many forms, from denial of service attacks (where your website is hit with so much traffic it crashes) to hacking of customer accounts to obtaining personal information. There have been a number of high profile cyber-attacks in recent years, and if you consider the amount multi-national corporations invest in cyber-security, it’s safe to say that no organisation is immune to cyber criminals.

Ensure that online safety is paramount in your corporate culture. Having a plan of action just in case is a must for any online business owner.

Examples of Cyber Security threats:

  • Phishing emails
  • DDOS attacks (Denial of service)
  • Keylogging
  • Bots
  • Malware / Ransomware

Reduce the risk:

  • If your business is heavily reliant on IT, make sure you regularly back everything up
  • Using a secure cloud service to back up your data can help if your offices are inaccessible
  • Keep all PCs, laptops and software up to date – particularly anti-virus programmes!

Power outage

In 2017, a power outage in Lancashire left an estimated 63,000 properties without power resulting in multiple business disruptions, traffic signalling issues and closures of schools and universities

Power cuts can be caused by a number of things; from severe weather to roadworks, they often happen when you’re in the middle of something important, causing any amount of disruption and chaos. We often take for granted how much we rely on electricity, but there are a few things that you can do to help prepare for an outage.

Get together an emergency kit that contains  torches, separate spare batteries, warm clothes, plenty of food and drink, as well as a wind up radio so you can keep up to date with the local news and know how long you can expect to be without power. Power surge protectors can protect your computer equipment, while standby generators can provide some extra juice to let you carry on working for a while. Solar powered lighting could be a good investment, saving money on electricity bills, as well as helping you in times of need.

Power cuts can be caused by:

  • Wind and wind borne debris
  • Snow / ice
  • Lightning
  • Underground water
  • Falling trees
  • Groundworks and roadworks

Reduce the risk:

  • Always have a good supply of batteries for torches / radios etc
  • Install emergency lighting
  • If you can warrant the cost, having a back-up generator could help minimise disruption, and allow you to provide a skeleton service to your clients


The National Fraud agency estimated that theft and business fraud cost the UK economy as much as £73 billion a year

Theft can occur in a number of ways; it could be shoplifters or employees, a hold up at your premises or a break in at night; very little can prepare you for the feeling of personal violation when you discover your goods or belongings raided and ransacked.

However there are some preventative measures that you can put in place to help deter thieves, from monitored intruder alarms to CCTV and even security guards. These can often act as deterrents, and may assist you in pinning down a culprit.

Theft can include:

  • Break ins
  • Hold ups
  • Identity
  • Deception
  • Shop-lifting

Reduce the risk:

  • Minimise the amount of money kept on the premises as this can help to limit the attraction to thieves
  • Installing alarms and CCTV could act as a deterrent – particularly if they are monitored
  • Install secure locks on all windows and doors, and limit the number of key holders to the premises


Cifas, a fraud prevention agency, reported that British businesses lost at least £40m from frauds perpetrated by their own employees over the period of a year in 2016/2017

Fraud can also take many forms; from stolen account details to identity theft, it can sometimes go undetected for a long period of time. You could be targeted by complete strangers or even someone you know. However, there are a few essentials that can help you stay protected that should become part of your business culture.

Never give out passwords and monitor your accounts closely so you can spot any suspicious behaviour at the earliest stage. Take regular stock checks and record them to identify any irregularities against your records. Restrict access to confidential information or programmes that could pose a threat to your business if it fell into the wrong hands, and give those that require access individual log in details so you have a full audit trail if anything goes amiss.

Fraud could take many forms:

  • Account take over
  • Credit / debit card fraud
  • Computer software service fraud
  • Computer hacking
  • Employee fraud
  • Fake invoice scam
  • Intellectual property
  • Identity theft

Reduce the risk:

  • Establish clear policies and procedures to protect your business
  • Do regular audits as well as the odd spot check
  • Monitor and reconcile all accounts on a daily basis

Business continuity planning

How to pull your business continuity plan together

Assessing the risks to your business can help you understand and prepare for any of the above scenarios. Here are just some of the things that you should consider when compiling your business continuity plan:

  • Who are your main clients?
  • What are your main products or services?
  • Who are your main suppliers?
  • Look at your business operationally – what equipment and systems are fundamental to running your business?
  • Who is instrumental in running your business, and how would you cope without them?
  • Where is your customer and supplier data stored?
  • Could you meet deadlines if something unexpected happened?
  • How do you communicate to staff, clients and suppliers if your normal methods are unavailable?

To identify the financial and operational impact that an incident could have on your business, you will need to analyse the following:

  • Sales, income, regular orders and repeat customers
  • Increased working expenses
  • Contractual penalties (if you are unable to meet deadlines)
  • Customer dissatisfaction and the long term impact on your client base
  • Potential damage to your business’ reputation
  • Delay of implementing new business plans or products / services
  • Critical business functions and processes
  • The timing of an event and the maximum impact that it could have at different points in the year, or in the run up to your busiest times (i.e. Christmas, holidays etc)
  • Consider all disruptions – minor to major (i.e. a power cut vs a fire)
  • Scale the disruption based on severity – you should consider the impact of each event on a minor and a major scale (power cut for a few minutes vs a few days)

Plan your continuity strategy

Using the information collated, you can now plan your strategy for each of the biggest threats to your business.

Think about each threat in turn,

  • assess the worst possible scenario
  • who you would need to contact
  • what you can do to minimise the disruption
  • what you would need to continue providing to your customers with your products or service
  • what could you use to substitute certain parts of your business (i.e. computer systems, storage space, offices etc)

Breaking down each element allows you to structure your plan for key aspects of your business, and will overall paint a good picture of how to cope when disaster strikes. Allow for some flexibility with each part of your plan, so it can be adaptable in different circumstances and cater for out of the ordinary scenarios.

Share your plan with other key stakeholders to ensure you have covered all angles, and catered for all eventualities.

Test your continuity plan

43% of UK companies who have a business continuity plan do not test it annually to ensure that it works

You will now be ready to put your plan to the test – turn it into a fun but serious exercise to get buy in and cooperation from your staff.

Test each part of your plan, for each disaster and make sure you take notes along the way. Put your emergency kits to the test and play out each scenario as though it was the real thing. Once you have put the plan to test, ask each participant for feedback. What went well? What didn’t go so well? And where are the gaps?

Keep it simple, allow for flexibility and be accommodating to criticism. With a few practice runs and some fresh perspectives, you will soon have a robust continuity plan ready in case disaster strikes.

Get everyone involved

From staff to neighbours, family and friends, the more people you can include in your plan to help, the more people will be prepared to help. Assessing your plan alongside a neighbouring business can help you collaborate and work together to prepare and support each other.

Make sure you have an up to date list of contact information for staff, suppliers and other key people in your business and check it on a monthly basis.

Speak to the authorities to check your plan against local regulations and restrictions and gain emergency contact details for disaster recovery services available. You will also be able to assess the most prominent threats to your business from the history of the local area. For instance, if your premises is prone to flooding, or if there has been a history of severe weather in the area that may pose a threat.

Keep up to date

One of the most important aspects of your business continuity plan is ensuring that it is kept up to date, checked regularly to ensure it is still relevant to your trading activities and accessible away from your business premises.

Every time you change suppliers for instance, you will need to update your plan. If you change insurance companies or utility providers, update their contact information as well.

Keep testing the plan, familiarise yourself and as many people involved with your business as possible. If and when the worst should happen, you will be more than prepared to deal with anything that comes your way.

19% of financial institutions who have business continuity plans have not tested them in the last five years

Insurance cover to complement your business continuity planning

Having a business continuity plan in place is an essential part of your business set up, and means that when disaster strikes you are prepared to deal with it in some way or other.

Business insurance can not only cover the cost of rebuilding premises and replacing contents, stock and equipment; but can also cover loss of income and fixed expenses if you’re forced to cease trading following an insured event.

Business Interruption insurance

Business interruption insurance and business continuity planning go hand in hand. Check whether your insurance company has any Business Continuity Guides or Templates to help you create your plan. The insurance can assist you through the difficult initial period of disruption, generally covering additional expenses or loss of profit if you are unable to trade following an insured event. The cover could protect you while you get your business continuity plan into action. Having a robust business continuity plan in place can reduce the cost of a claim to the insurance company and, therefore, help control business insurance premiums. In some circumstances it could also possibly help reduce your business insurance premiums.

If you would like to review your insurance requirements and are looking for some expert recommendations, then give us a call. Our agents are on hand to provide advice on your commercial insurance needs.

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