A new report published by the Business Continuity Institute has revealed that insurance firms offering policies on business interruption (BI) were more likely to underwrite a firm that had proper business continuity management (BCM) and contingency plans to ensure continued operation when disaster strikes.
The report was compiled after a meeting which took place in March in order to set out a shared appreciation for business continuity planning that could be understood by both those in the industry and those looking to offer BI insurance.
Major insurance groups, including AXA, Zurich and BSI took part in the round table discussion in an effort to improve communication between insurers and industry and to discuss the drivers behind policy premiums and risk assessment.
The gathering aimed to cover the way in which BI insurance and business continuity planning operate in relation to one another, before discussing the coverage that insurance firms are expecting to include in a typical BCM policy.
The BCI established whether the terms of an insurance policy could be altered to suit the type of business continuity planning that a given firm had put in place. It also looked to encourage appropriate communication between those in charge of business continuity and those involved in choosing and funding insurance within an organisation.
Five major levels of business continuity benefits were identified. Firstly businesses that have BCM are perceived as being a better risk by potential insurers because they can return to normal operation quickly and implement disaster recovery strategies with minimal delay thanks to prior planning.
By implementing business continuity plans, businesses are able to mitigate the impact of events against which it is hard to secure insurance, including widespread outbreaks of illness. Furthermore the firms that have invested in understanding business continuity requirements will be better placed to compare and analyse different BI policies.
With business continuity and disaster recovery schemes in place, the meeting concluded that firms can get the best deal on BI insurance, and even seek cover in areas not habitually offered by insurers.
