Business interruption?!?
Business Interruption - what the heck does this phrase mean?
In the insurance world (this blog's main interest), it means that we have to consider the effect of a disaster on the finances of a business. This does not have to be a major event such as an earthquake; even e.g. a tiny fire in an adjoining building can cause an interruption to your activity. Or the loss of your major supplier - what would be the consequences?
It is sensible for all business owners, (yes, even one-man companies) to analyze where the specific areas of vulnerability occur. Once the analysis has been completed, can these be eliminated, reduced or otherwise accepted? Such a review should be undertaken at regular intervals to accommodate changes in the business environment. This process is known in the insurance industry as Business Continuity Management, i.e. the business owner is managing the process of keeping the company going without any interruption.
Going back to the loss of a supplier - in early 2011, Vodaphone's mobile network was switched off following theft of equipment at their Basingstoke exchange. Does your business depend on 24/7 access via your mobile phone? If it does, would you have managed with your system being unavailable for a long period? These are the types of question that business owners need to ask of themselves.
Risk Managament is the process of evaluating such threats. Insurance is one excellent element of risk management but far better to prevent the loss happening in the first place
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