Business continuity systems protect a company’s core operations from natural hazards, accidents, security breaches, and key personnel loss. All businesses should have a system in place, with data management being a crucial component. Key person insurance can also be included to compensate for the loss of essential staff.
A business continuity system helps ensure the continuation of a company’s core operations in the face of natural hazards, accidents, security breaches, and death or serious injury to key personnel. Different types of business continuity systems address these various threats and offer different levels of protection. The science of risk management is not only used to evaluate potential threats to business continuity, but also to prevent, reduce and minimize the impacts of those threats. There are several approaches to developing a business continuity system.
All businesses, regardless of size, should ideally have a business continuity system in place and it should be updated annually, as business operations may change over time. The smaller the business, the more likely it is that disaster recovery will be insufficient to avoid dire economic consequences. Large companies typically have complex and multifaceted business continuity systems, which would in all likelihood ensure the continuation of those large companies, even in the face of a major disaster. With a small business, however, the death of a key person, for example, could lead to the closure or sale of the business.
Virtually any business continuity system will likely include computerized data management. A data management business continuity system implements software and hardware strategies to preserve data from unauthorized intrusion and loss due to damaged hardware or corrupted software. The larger the company, the more robust backup systems will need to be to effectively protect against data loss and downtime.
These systems can be autonomous. If so, the business will still require a method to ensure the continuation of data-independent operations, such as activities involving personnel management, sales, manufacturing operations, and financial management. Business continuity systems also help mitigate the deleterious impact of a staff exodus.
For a small business, the temporary or permanent loss of a staff member or owner performing essential tasks can negatively impact the continuity of a business. There are business continuity schemes which address the loss of a key man or woman, through the provision of insurance for key persons. This insurance compensates the business monetaryly for the loss or prolonged absence of the person. This compensation allows for the hiring of additional help during the transition period. Key person insurance can be part of a larger business continuity scheme, or it can be a standalone provision of a business continuity plan.
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