How to create a business continuity plan

Posted in Business

Open sign hangs on front door of shop

When you run a business, there’s nothing worse than a missed opportunity. And when an unexpected event—whether it’s natural or man-made—disrupts your business, every minute can feel like a missed opportunity.

To avoid such issues, it’s essential that you have a business continuity plan in place. A business continuity plan will help you limit downtime and loss in the event of a disruption, while boosting customer and employee confidence, lessening business risks and reducing potential financial losses.

Follow these five steps to help create your business continuity plan and keep your business on track, even during the toughest of times.

1. Uncover your risks

The two biggest mistakes businesses make are failing to identify a potential threat and underestimating the severity of a known threat. To avoid these mistakes, follow these simple steps:

  • Identify your threats, including natural hazards that might affect the location of your business.
  • Rank the probability of those threats, then rank the severity of each.
  • Multiply the probability and severity to create scores for each and address the highest scores first.

2. Analyze your operations

Responding quickly to a disruption can be the difference between survival and closure. Identify your key business functions and processes and decide how long you can go without them and remain in business. Consider the answers to these questions when formulating your answer:

  • What is your main product/service?
  • What are the things that could most likely impact your ability to do business?
  • Which of your business functions and processes have legal, contractual, regulatory or financial obligations?

3. Know how to contact employees and vendors

What happens if an emergency prevents your employees from accessing your business? Would a local disaster also affect your vendors? Two-way communication with your employees and vendors is critical before, during and after a disaster. Make sure you can answer the following questions:

  • Would you know how to reach your employees?
  • Do you have current home and mobile telephone numbers, addresses, emails and emergency contact information?
  • Do you have current contact information for key suppliers, vendors and business administrators?
  • Is all this information available offsite from your business location?
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4. Have an information technology (IT) plan

No matter the size or scope of your business, it’s nearly a certainty that you rely on computer hardware, software and digital data. Having access to these tools and information is crucial to your ability to stay in business.

  • Keep backup copies of everything on or accessed by your computer including operating systems, critical software, files, logins and passwords.
  • Store one backup copy onsite and another in a safe at an offsite location that will still be available in the event of a large-scale disaster.
  • Before an event, shut down and unplug all your computer hardware. Consider elevating or moving equipment offsite.

5. Prepare your business finances

Whether it’s having the correct insurance or an emergency cash fund on hand, preparing your finances in advance of a disaster is critical to keeping you in operation during a disruption.

  • A well-stocked emergency cash supply can help you buy supplies or crucial equipment during a disaster.
  • Identify all financial obligations and expenses that must be paid.
  • Work with your independent insurance agent to determine the best coverage for your business.

To help you get started, Grange Insurance and the Insurance Institute for Business & Home Safety (IBHS) are happy to offer the following resources to help you develop a business continuity plan that fits your needs. For help creating your own business continuity plan, download the OFB-EZ toolkit below. Need more information on planning for severe weather events? Download the EZ-PREP toolkit below.

Business Continuity Program

IBHS’s simple-to-use business continuity program that focuses on recovering from disruptions to stay open for business.

Download toolkit

Severe Weather Guide

Is a storm heading your way? Check out IBHS’s severe weather planning guide and customizable checklist.

Download toolkit


This article is for informational and suggestion purposes only. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. Please contact a local independent Grange agent for complete details on insurance for your business, including coverages and discounts.

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