In the AAIGOT Insurance Agency Inc. blog in July 2023, we discussed how hiring practices and commercial insurance purchases can help reduce your Houston, TX, business risk. In this blog, we’ll cover how writing an emergency response and business continuity plans can also reduce your business risk.
Business Risk Defined
Investopedia defines business risk as any factor that could lower a business’ profits or cause it to file for bankruptcy. Both internal and external factors qualify as business risks. Although a company cannot avoid all risks, each business can mitigate the threats it faces.
Risk Identification
You can’t protect your business against what you don’t know exists, so the first step in building risk resiliency comes from risk identification. Conduct a risk assessment that identifies all the perils your business faces. Perils businesses face go beyond the physical, such as tornadoes and floods, and extend to factors like embezzlement, fraud, and reputation attacks. The Federal Emergency Management Agency (FEMA) website ready.gov provides businesses with free tools to help with risk identification.
Addressing Risks
Once you uncover the possible perils your business faces, develop response plans. Write an emergency response plan for physical perils that could damage your place of business or employees, such as fire or hurricane. These plans contain emergency scenarios, identify resources available for response, and include protective actions that preserve life and safety, such as an evacuation plan.
The response plans your business develops should also include a business continuity plan. This type of plan ensures that your company can continue operating during a peril or hazard. A business continuity plan addresses more than physical threats. It also includes your business’ responses to hackers, fraud, embezzlement, and other negative situations. Your business continuity plan would instruct employees on quickly transitioning from doing business from the office to operating at an alternative location or from home/sheltering locations.
Training Staff
Researching and writing the plan completes only half of the preparation process. After developing the plan, you train all staff on implementing it. From entry-level interns to CEOs, all employees complete training to know what to do in an emergency.
Testing the Plan Responses
Remember the fire drills of grammar school days? Those wonderful moments of getting out of a monotonous lecture served a valid purpose. Each school tested its emergency evacuation plan, which it made so simple that, quite literally, a small child could follow the instructions and reach safety. Test your emergency response plans and business continuity plans in the same way. Testing plans uncover problems or mistakes in theoretical planning that you amend.
Contact Us Today
Commercial insurance should form the cornerstone of your business risk response, but every business needs a response and business continuity plan. Let AAIGOT Insurance Agency Inc. help you protect your Houston, TX, business against risk. Turn to a business continuity specialist or hazards plan consultant to identify your business risks and create actionable plans to reduce your business risk and protect your staff.
