Insurance and contingency planning
Insurance provides financial compensation, after the event, for a
physical, or business related loss. The amount of compensation is calculated
after thorough assessment following the incident giving rise to the loss. There
is often a period of negotiation between loss adjusters and loss assessors,
working on behalf of the insured and the insurer, before a settlement is
reached. The cash compensation is then paid to the insured party.
Insurance has a very important role, but there are almost no cases where
insurance alone will enable a company to resume its business activities within
an acceptable time after a disaster or serious disruption.
Certain insurance policies, such as 'business
interruption insurance', can provide funds to operate a pre-planned 'recovery'
or business contingency plan.
A well-prepared business contingency plan will enable the business to begin a
phased recovery immediately after the occurrence of a disaster. Insurers
generally recognise the advantages of well prepared contingency plans, which can
considerably reduce the total cost of a 'disaster'.
© 2003 Business Continuity
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