Pin Me

What Is Business Resumption Planning?

written by: Ksingh•edited by: Jean Scheid•updated: 8/16/2010

To protect a business from any risk, a contingency plan is framed which is often termed as business resumption planning. To learn the answer to what is business resumption planning, the following will give you a better understanding.

  • slide 1 of 4

    What Is Business Resumption Planning?

    Strategic Planning Symbol Business resumption planning is a contingency plan that is prepared to protect businesses from vulnerabilities that can strike them at any point in time. For a business to think of worst case scenarios is usually not part of the everyday business strategy, but it should be. Research shows that businesses who fail to consider business resumption planing and fail to adequately plan for a variety of disasters, could become extinct 60% to 80% of the time.

  • slide 2 of 4

    Business Interruption Insurance

    Business resumption planning then involves covering one's business with business interruption insurance. Otherwise known as business income insurance, such policies cover property losses and other extra expenses such as payment to employees, which does not stop because the businesses’ income has become nil. Subject to other things being equal, insurance companies have standardized policies for small businesses whose turnover is under $5 million and the property area is about 5,000 sq ft. The benefits are extended for a period of 12 months. Larger companies would have to do more planning to decide what to cover and what could be left. In this regard, normally a check list as outlined below can assist business owners.

  • slide 3 of 4

    Major Considerations

    The first step is to form a business resumption planning committee, which then takes into account the following major issues; nonetheless what has been pointed out below should be taken only as general guidelines as they can vary from business to business.

    • Listing of all major functions and activities of a company and assessing the risks in order of vulnerabilities and their impacts and making a decision on who would be at the top to supervise disaster-relief operations.
    • Visualizing a scenario to roughly determine how long the business activities are likely to be disrupted and what would be the quantum of financial needs during the period of such interruptions.
    • Prioritizing the payments so that the priority goes toward expenses that would resume the businesses in the least amount of down time.
    • Once a business interruption resumption plan is prepared and documented, it should be communicated to the employees and adequate training would have to be provided to them to keep them ready to face any such eventualities.
    • It is possible to forget it in the fortuitous event of things going smoothly; hence, it is necessary to review them as often as deemed fit.
    • Conducting a mock exercise would help in assessing preparation in a stimulated scenario.
  • slide 4 of 4

    Legal Requirement

    In the legal context, all the businesses should make themselves aware of the provisions of Sarbanes-Oxley Act, 2002. In this context, it would be prudent to seek professional guidance from experts who could have been involved in the preparation and handling of such disaster plans and occurrences. When considering what is business resumption planning, it is a multi-disciplinary document and hence, it needs inputs from cross-functional experts who have practical expertise in legal, financial, human resources, engineering and other technical areas.

    Image Credit: Strategic Planning System -