INSURANCE

Power Out: How to Prevent your Supply Chain from Diving

Harris Balcombe

By Alex Balcombe at Harris Balcombe

Flights grounded. Trains cancelled. Internet down. Power out. From floods, fires and acts of God through to political decisions and hacking/malicious attacks on your software, a business-halting incident or disaster could happen to your business operations at any time. This is often not preventable from a business perspective, and said incident can heavily impact your supply chain.

Alex Balcombe at Harris Balcombe

Alex Balcombe at Harris Balcombe

While you cannot prevent the incident, you can take steps to minimise the downtime and ensure your operations keep running smoothly.

Identify High Risk Areas

By identifying the high risk areas, you can implement mitigation strategies to support should you suffer from an incident. For example, the Land Registry has a Flood Risk Indicator service which is helpful for all businesses as it can provide you with a specific report of flood risks depending on your exact property.

If you are at risk, consider storing important and confidential information in high places, and having a second copy of all confidential or secret information. Move your company cars to higher grounds if possible, and place any freezers or refrigerators on plinths if you think that they are at risk. Most importantly, stay aware. You can’t predict the weather, but if a weather warning is issued in your area, take the necessary precautions.

Share Important Information

Take a regular inventory of your stock, and make sure that everybody who needs to know relevant information knows it, should the worst happen. As mentioned above, any product or inventory information should be duplicated, to prevent it from being erased should there be a fire. Whether it’s a top secret recipe for a sauce or a password for a financial document, you should still keep it in a different, trusted location just to be safe. You’ll thank yourself in the long run, as it will speed up your reaction time.

Protect your Digital Assets

As technology becomes more and more sophisticated, hackers are always developing their skills to break into the abundance of personal and business data that we hold. Protecting yourself against cyber theft is just as important as protecting your house from a burglary. Have a prevention plan in place, consult an IT specialist, and install the relevant network security to protect your digital assets.

Critical Communication

External communications in the event of business interruption cannot be underestimated. Many businesses focus on recovering systems and products, but forget to communicate to their employees and to the public what is going on, among all the pressure. Designate someone to be in charge of communicating a message to the press should you be forced to close or change operations. It relieves the pressure off your hands in the moment, and also salvages your company’s reputation. Make sure you have a consistent message across all social and media channels to prevent any scrutiny.

Train your Employees on Prevention and Reaction

Internal communications is important, and is perhaps the most crucial for a smooth recovery. Employees should know how to respond, who to contact, where to be and any other crucial elements should an incident happen and no senior management is there.

It’s also a good idea to annually train your employees on what they should do should an incident occur. Just as you have a proper fire procedure, you should have a disaster recovery procedure which everyone is aware of. Which brings us onto…

Insure Yourselves

While building insurance will cover the costs for any physical damage, it does not cover against losses of income that the business would otherwise have made had the conditions been normal and the incident not occured. For instance, After Storm St Jude hit Britain in 2013, more than 600,000 properties were without power. Hotels had to move guests away and restaurants had to close in areas at the end of the energy line who were last to have their network restored. These businesses should have been able to claim for business interruption from their insurers. However it’s not always that simple…

Get a Specialist Support Team

The claims process is lengthy. It includes reviewing your company’s historic performance and anything else that could have influenced your trade. Performance of closely locating or otherwise relevant businesses in your market will also be examined. They will scrutinise your circumstances to, put simply, try to pay you as little as possible, working with a team of professionals to check you have met all of the conditions of your policy.

If you seek a specialist support claims consultant, they will help you along the whole process and pick up on crucial points. They will advise on the best course of action, help you to understand your circumstance, minimise further business loss and assign you a team of experts to help. They will also handle all of the paper work for you, to save you the headache, and negotiate with insurers to prevent any delays or disputes.

Today’s supply chains are more dispersed than ever before, and your supply chain does not end with your chain – it’s far more varied. Little things can cause interruptions, but also big things that are out of your control. If you take the above steps to minimise downtime and act efficiently and reactively in the event of a disaster, your business operations will be running smoothly again in no time.

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