As business owners it’s very easy to get caught up in the day to day running of the business – after all, making sure that things are running smoothly is what it’s all about, right? But what about when things aren’t running smoothly? What about when things go wrong, when disaster strikes? Just as you plan for business growth and forecast sales, you should also develop robust plans setting out what you will do in the event that things go wrong: in essence, how your business will recover.

To help develop your business recovery plan, think about the kind of disaster events that might impact your business. Looking back at 2018, here are some of the high profile events that caused businesses to shut down for varying periods of time:

• In February KFC was forced to close more than half of its UK outlets when it ran out of chicken. It blamed DHL for a delivery problem, who in turn said they had supplier problems. The shortage continued for a few weeks and eventually KFC reverted to their original supplier, who had only recently lost the contract with KFC.
• March brought the Beast from the East. Blizzards and snow drifts disrupted businesses across the country for several days.
• March also saw the Novichok poisoning in Salisbury. The attack closed much of Salisbury for three months. Just as businesses were starting to open again, there was a second incident in nearby Amesbury in June. It took until the Autumn for businesses to start getting back to normal.
• In June, Visa went down, resulting in many businesses using this payment system being unable to make or take customer payments for a few days.
• In December, the O2 network also went down for a few days, again making it impossible for many businesses to operate and fulfil deliveries.
• Just before Christmas drones at Gatwick closed the runways for more than a day. It took several more days for flights to get back to normal.

Looking at events that happened in the recent past is a good indicator of what might happen in the future. Let’s face it, we can’t control the weather and are being warned that we can expect more extreme weather events in the future, which could be very disruptive to business.

As our reliance on technology grows, so does the risk that a technical outage will bring businesses to their knees. The increasing threat of cyber attacks only increases the probability of a technical failure hitting your business.

It’s clear from the examples here that different types of disaster cause disruption for varying time periods. A few hours or even days may be an inconvenience but probably won’t result in any long term impact. But terrorist attacks, such as the one seen in Salisbury, can be more devastating for business, especially if they are not prepared. Fires, floods and other physical damage can take longer to recover from.

To protect your business, as well as taking out business insurance to cover your physical assets, you should have business interruption insurance in place to cover the costs while your business is unable to trade. When calculating the amount of business interruption insurance you need, it’s best to err on the side of caution. The recommendation, as a rule of thumb, is to plan for two years’ worth of cover.