Creating a Business Continuity Plan

Transcription

1 Family Office Information Creating a Business Continuity Plan Hurricanes, fires, terrorist attacks, earthquakes and tsunamis aren t the only kinds of events that can cripple a family office. More common occurrences, such as power failures, IT system crashes, supply chain problems, or a flu epidemic, also can jeopardize the continuity of the family s lifestyle. To help bolster your defenses against such risks, Private Client Group encourages you to implement a Business Continuity Plan (BCP). Understanding the need Whether you re in a small rural office or a high-rise building, a BCP can serve as your family office s first line of defense against losses due to natural- or man-made disasters. Your BCP should: Include a series of contingencies that can enable your family office to quickly return to business as usual should an interruption occur. Plan for the recovery and maintenance of all aspects of your business, not just for IT components. Prioritize the objectives and critical operations that are essential for recovery. Be updated regularly based on changes to your business processes, staff and lessons learned from testing the plan. Consider this The following are just a few examples of situations that can disrupt your family office at any time: Environmental incidents tornadoes, hurricanes, mud slides, wildfires, floods and earthquakes Equipment or system failure power grid shutdowns, blackouts, computer viruses and security breaches Loss of utilities and services electrical power failure, loss of water supply, loss of fuel supply and fuel shortage Information systems incidents cyber crimes and IT system failures Personnel issues illness, resignations, maternity leave Organized and/or deliberate disruption acts of terrorism and sabotage, theft, arson and labor disputes Legal/regulatory action lawsuits and SEC violations Page 1/5

2 Creating a plan The following steps will help you gather the information required to create and execute a plan for your office. Step one: Assess your risk. Private Client Group can help you determine which events will most likely affect your family office. Is your office located in an area prone to hurricanes and/or tornadoes? Knowing what may occur will help you determine your needs and plan accordingly. Step two: Identify the elements that are critical to your business. Data back-up and recovery systems (hard copy and electronic) Financial and operational requirements Alternative communication between you and the family Alternative communication between you and your staff Contingency office space Books and record requirements Other critical systems Step three: Identify an alternate location. If something happens to your current location, you must be prepared to relocate. Could you operate from your home? Is there another business in your area with whom you could share space? Step four: Appoint someone on your staff to be crisis manager. The crisis manager will be in charge of leading the staff should a disaster strike and is responsible for updating the BCP throughout the year. Step five: Backup your data. Keeping both hard and electronic copies of all important documents and files will enable you to operate during a multitude of scenarios. Be sure to keep copies in a safe and secure offsite location. Step six: Create an emergency phone tree. In the event of an interruption, this will make it easy for you to contact employees, clients and vendors. The phone tree should be reviewed and updated regularly, and saved in multiple locations. A process should be determined for contacting your clients if an interruption takes place and you are unable to access your systems. Step seven: Evaluate your emergency insurance coverage. Will your insurance adequately cover you in the event of a business interruption? How long will it be before you are completely operational? Consider purchasing business interruption insurance, which may compensate you for lost income. Step eight: Test your plan. Regular tests will uncover inconsistencies and weaknesses that can be addressed immediately. Update the plan accordingly and notify those who are impacted by the changes that have been made. Page 2/5

3 Sample BCP outline Following are the major components that should be included in a BCP: 1. Employee contact information 2. Key supplier/vendor information 3. Key contacts 4. Critical business functions 5. Recovery location 6. Vital records 7. Critical telephone numbers 8. Critical supplies 9. Equipment/machinery/vehicles inventory 10. Computer equipment and software list 11. Voice/data communications needs 12. Miscellaneous resources 13. Disaster response checklist 14. Updates and annual review Once your plan is developed, keep a hard copy in your office and at an offsite location. Check list of supplies The following items should be available in your office: Working smoke detectors and fire extinguisher Emergency first aid kit Flashlights and light-sticks AM/FM hand crank radio Bottled water Non-perishable food and utensils Paper and office supplies Tools and other supplies Blankets Camera Cash Emergency contact list Documentation Page 3/5

4 Prepare your office If disaster strikes while you are at the office, it could take several hours or longer for help to reach you. By having the right supplies on hand, you can help ensure that you and your employees will be safe and comfortable. The following items should be stored in your office at all times: Working smoke detectors and fire extinguisher Test detectors twice a year and keep extra batteries on hand. Check the pressure indicator on the fire extinguisher monthly. Emergency first aid kit It should be stocked with scissors, tweezers, a variety of bandages, gauze and tape, anti-bacterial wipes, first aid ointment, vinyl gloves, a first aid book and any other items you deem essential. Please remember to check the kit regularly to be sure it remains fully stocked. Another first aid kit should be available to employees for everyday needs. Flashlights and light-sticks Flashlights, light-sticks and extra batteries should be kept on hand. AM/FM hand crank radio Keep a hand crank radio on hand to access local weather and emergency broadcast reports. Bottled water Have at least one gallon per person to be used for drinking and cooking. Water should be stored in bottles that are easy to transport. Non-perishable food and utensils A supply of nonperishable food should be kept on hand. Be sure to have a manually operated can opener and plastic utensils. Paper and office supplies Keep a healthy stock of paper, markers, pens, pencils, toilet paper, tissues, paper plates and towels. Tools and other supplies Maintain supplies like duct tape, waterproof plastic sheets, a wrench, whistle, compass, plastic bucket with lid, gloves, hammer and garbage bags. Blankets Keep blankets and pillows in the office should you need to sleep at your location. Camera Disposable cameras come in handy when it comes time to record property damage. If the camera requires batteries, keep an extra supply available. Cash Cash should be kept on hand for emergency use. Emergency contact list Maintain a current list of emergency contact information and numbers for local authorities. It is best to keep a copy of the list in multiple locations for easy accessibility. Documentation Power, cell phones and computer systems may be unavailable. Be sure to keep a written record of important phone numbers. Even if internet access is available, it could be limited, so we suggest keeping a written list of important URL s that may come in handy. Page 4/5

5 The main benefit of a BCP is enabling your family office to recover quickly from unexpected disruptions. However, there are additional benefits including some that could help you attract and retain client families. An effective plan can help return your office to business as usual so that you can meet customer needs, provide employment and ultimately generate profit. In addition, having a plan in place can: Show your client families that you have taken steps to ensure continuity so that you can provide them with the superior customer service they are accustomed to. Show staff that you have their employment and personal well-being in mind. Significantly reduce your loses in the unfortunate event that a disruption, large or small scale, does occur. Your client families also may benefit from taking proactive measures to ensure their safety in the event of a disaster. Our emergency preparedness service offering is available to assist in preparing a home security profile and a customized family safety plan. As part of this service, your clients can receive a complementary consultation that includes offerings such as: Analysis of criminal activity in the area over prior 36 months Background checks on private staff Review and certification of physical security system Creation of emergency plans for family members in the event of evacuation Certified CPR training for staff and family We suggest reviewing your BCP with current clients and prospects, noting how they benefit. We have a check list for your clients to use for their own planning purposes. You can use this document to facilitate conversations. If your clients already have an emergency plan in place, it can serve as a reminder to update it regularly. In the event that your office is shut down: Provide your Chartis clients with our Risk Management Resources Hotline: Leave a message on your office voic with alternate phone numbers or locations where you and your staff can be reached. In the event of a claim, have your clients call our claims service at To learn more or to schedule a complimentary consultation for your office, please contact Gina Teresi at gina.teresi@chartisinsurance.com or Chartis is the marketing name for the worldwide property-casualty and general insurance operations of Chartis Inc. Private Client Group is a division of Chartis Inc. Insurance is underwritten by a member company of Chartis Inc. The information provided in this document was accurate at the time it was drafted. However, the information is subject to change at any time. This document is simply a reference created to provide a basis for family office professionals to discuss the development of business continuity plans with their clients and prospective clients and is not meant to replace the sound judgment and advice of an independent risk management professional. Chartis provides no warranty regarding the accuracy of the information contained in this document. Page 5/5