Make Business Interruptions a Thing of the Past

business closed due to business interruption

Business interruptions can come in many forms and from countless sources. From natural disasters to cyber threats, a majority of businesses do not have the luxury of being down for any considerable amount of time. In the U.S. it has been stated by the Federal Emergency Management Agency (FEMA) and the United States Small Business Administration that 40% of businesses fail to open their doors back up after a disaster strikes, with a staggering 90% of businesses failing within two years after a disaster. For small to medium sized companies who do not hold the surplus capital to weather any storm (no pun intended), a business interruption can be a life or death situation. However, there is hope, by being proactive, businesses can ensure they are meeting the needs of their customers by having the plans in place to manage events that are completely out of their control. Below are some options companies can implement to ensure business interruptions become a thing of the past.


Complete a risk assessment 

Before a business can prepare for an interruption, it is wise to complete a risk assessment to see which adverse events could threaten the company if they are unable to continue operations. A risk assessment begins with identifying risks specific to the business. Once the risks are identified assessing the frequency and impact of such events allows business owners to prioritize which risks could threaten the survival of the company if an interruption were to occur. Once risks are identified and measured, mitigation activities can be introduced to minimize the impacts these risks have on continuing operations. For example, an IT focused company needs to have in place risk mitigation measures to minimize or prevent the impact of a cyber breach on meeting customer demand. These mitigating activities will pay off handedly in the face of an adverse event (e.g. cyber breach) which can shut down a business’s core operations. Risks assessments are also beneficial as they make business owners think about present as well as emerging risks that could impact the company in the future.


Prepare a contingency plan

Murphy’s law clearly states if something can go wrong, it most certainly will at some point. Business owners should always have in the back of their mind the possibility of something interrupting their operations in some form or fashion. Preparing contingency plans specific to keeping the business up and running is a sure-fire way to keep business interruptions minimized or avoided all together. For example, as reported by, in 2017 a heatwave was the culprit of a massive power blackout in South Australia impacting 90,000 homes and businesses. This is an external event that businesses have no control over, however an event where impact to meeting customer needs can be controlled. A business having access to backup generators to keep the lights on can be a simplistic contingency measure to ensure interruptions, no matter the source, are a thing of the past. Other ways businesses can implement contingency plans for adverse events include entering into contracts with other businesses to assist in meeting customer demand, developing a business continuity plan, or having backup suppliers in the instance an interruption occurs outside of your organization which could cause indirect impact to your customers.


Build a crisis communication plan

No organization is 100% safe from crisis, whether from internal or external sources, any crisis can lengthen the adverse effects of business interruptions if not managed properly. In today’s time with the advancement of social media, a company’s crisis can become well known in a short amount of time. This does not work to the benefit of an organization, therefore showing how important crisis management is to the post-crisis survival of a business. A crisis communication plan will help address communications to internal and external stakeholders, creating clear communication channels where ambiguity and confusion have no place to interfere. A crisis communication plan is a proactive approach to communicating on any number of events that could shed a negative light on the organization and adversely impact reputation or stakeholder confidence. In today’s world, companies cannot simply bury their heads in the sand and wish problems away. Businesses must be proactive in how they approach dealing with adverse events that could pose harm to the reputation of the organization. Building a solid crisis communication plan is one way to ensure business interruptions have a minimal impact on customers and the public in general.


Practice makes perfect

Business disruptions costs money, there is no way around it. However, creating and implementing a business continuity plan can assist in minimizing the effects of disruptions to operations. A business continuity plan creates an internal process to be followed in the event of a crisis that interrupts a company’s ability to meet customer demands. A sound business continuity plan should identify stakeholders needed to lead the disruption recovery, resources required to get operations back up, and communication channels needed to ensure a speedy recovery from the crisis that activated the plan. However, just creating a business continuity plan is not enough, it must be practiced rigorously to be truly effective. Businesses should conduct a “stress test” of their business continuity plan by creating crisis scenarios relevant to the organization that could cause a real-life interruption. For example, a toy manufacturer may conduct a stress test involving a significant fire to a manufacturing plant which would result in a business disruption. The business continuity plan in place will be able to assist the organization in knowing exactly what to do to minimize the fire’s impact to the overall organization. By practicing such scenarios, gaps in the plan can be identified and improved creating a dynamic planning framework which proactively minimizes the impact of crisis that have not occurred yet. A powerful tool any organization can use to make business interruptions a thing of the past.


Obtain business interruption insurance

A 2015 study by Insurance Journal found that a staggering 66% of small business reported not having business interruption insurance, insurance that assists with net income loss recovery after a crisis occurs, such as a fire. Business interruption insurance in most cases is an add-on to a normal fire insurance policy covering certain sudden, accidental events that cause damage to property. However, this coverage is crucial to providing a lifeline to small businesses who do not possess surplus capital to survive business interruptions. By attaching business interruption coverage to a property policy, a business can assist with recovery of lost income covering the revenue that would have been earned if an adverse event had never occurred. An insurance broker would be able to provide the finite details of such coverage, however if small businesses want to improve their chances of surviving an operational disruption, a business interruption insurance policy should be at the top of the list.



For small to medium sized businesses, a disaster can quickly become a sink or swim situation where survival is the main objective. By proactively taking measures to minimize or avoid business interruptions, companies can create peace of mind and focus on building their businesses. A solid business disruption recovery framework will help keep the lights on and customers happy. Make business interruptions a thing of the past by taking the needed steps before a crisis occurs, in the end your businesses survival may depend on it.






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