Business Continuity International 

 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'.

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