Business continuity systems protect companies from natural hazards, accidents, safety breaches, and key personnel loss. Data management and key person insurance are crucial components, and all companies should have a system in place and updated annually. Small businesses are more vulnerable to economic consequences without a robust system.
A business continuity system helps ensure the continuation of a company’s core activities in the face of natural hazards, accidents, safety 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 used not only to assess 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.
Ideally, all companies, regardless of size, should have a business continuity system in place and updated annually, as business operations can change over time. The smaller the business, the more likely that disaster recovery will be insufficient to avoid dire economic consequences. Large enterprises often have complex and multifaceted business continuity systems, and these systems would likely ensure these large-scale business continuity 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 intrusions and loss due to damaged hardware or corrupted software. The larger the company, the more robust the backup systems will be to effectively protect against data loss and downtime.
These systems can be autonomous. In this case, the business will still require a method to ensure the continuation of operations that are not dependent on data, such as tasks involving personnel management, sales, production activities, and financial management. Business continuity systems also help to mitigate the deleterious impact of an employee exodus.
For a small business, the temporary or permanent loss of a team member or owner who performs essential tasks can negatively affect the continuity of a business. There are business continuity systems that deal with the loss of a key man or woman by providing key person insurance. This insurance compensates the company monetarily for the loss or prolonged absence of the individual. This compensation allows you to hire additional help during the transition period. Key person insurance can form part of a larger business continuity system or it can be an independent provision of a business continuity plan.
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