When things go wrong at work, you can face two types of consequences: immediate challenges and long-term repercussions. Unfortunately, business interruption risks – those factors that force you to put your operations and revenue stream on hold – can be easily overlooked.
In their 2018 Risk Barometer report, Allianz pinpoints business interruption as the most important business risk – for the sixth consecutive year. The report highlights some key causes that any business owner should keep in mind, and while some of these may come as no surprise, other risks are newer on the scene and tend to affect a wide variety of businesses.
What exactly is business interruption? Find out more about this crucial coverage here.
In fact, you don’t need to have a huge brick-and-mortar operation to feel the pinch (although a fire or flood could do more damage to a larger space and stock). In many cases, small businesses can suffer just as much when they’re forced to close their doors while they recover from a setback. Here are five key causes of interruption to Canadian businesses, plus a business impact analysis template with all the factors to consider in a smart business continuity strategy.
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This is a more traditional business interruption scenario, but one that continues to worry business owners. In fact, according to the Allianz report, 40% of Canadian businesses fear fire and explosion more than many other potential disruptions to their business.
Not all businesses will share the same level of risk when it comes to fire and explosion; the nature of your operations can determine whether or not this scenario is likely to unfold. Do you work with combustible dust, flammable liquids, complex machinery, or electrical hazards? If so, fire and explosion may be a sizable risk for your business.
The only risk that ranked higher than fire and explosion? Cyber incidents, with 42% of Canadian business owners admitting that a damaging cyber event is a top fear when it comes to business risk.
It’s not too surprising that more businesses than ever are concerned about cyber risk, considering how many attacks have made news headlines in recent years. And as supply chain management and industrial controls become more automated, cloud infrastructure becomes the norm, and interconnectivity spreads, any type of business operation could be interrupted with a well-placed cyber attack.
Know your risks before you build your business continuity strategy. Download our business impact analysis template to get acquainted with your unique business interruption risks!
More active hurricane seasons, earthquakes, and devastating wildfires in recent years are putting a lot of business owners on edge – which is no surprise, given that Allianz reported around $330 billion in overall losses from natural catastrophes in 2017 alone. For businesses, more natural disasters could mean more losses that shut down operations for uncomfortably long stretches.
And it gets worse. As globalization continues, natural disasters can bring even more risk of business interruption: a flood in one region could have a direct impact on the supply chain for a business in another region, and in the worst cases, it could bring those business operations to a halt.
Regulatory or legal changes
Globalization has changed trade dynamics in other ways, too. Uncertain political landscapes, coupled with new rules and legal changes, can shake up the way your company does business with international parties. In some cases, that can force a change in strategy; in others, it could prevent your business from growing in the ways you were hoping to take it.
Administration changes led to an unpredictable economy in 2017, and as uncertainty surrounding trade pacts continues, sudden problems could pop up for certain businesses, particularly in the manufacturing sector.
Anyone who works with complex equipment or machinery knows how much depends on a functioning system. When one crucial piece of equipment is lost or broken, you’re not only faced with repair or replacement costs – you could be left scrambling to fulfil orders, relocate to another facility, and convince unhappy clients to stick around while you recover.
Machinery breakdown can have immediate, lasting, and severe impact on operations, and 23% of business owners surveyed feel that it’s one of the biggest threats to their operations.
Know your risks and plan ahead with our template
Every business is different, and it can be difficult to uncover all the risks to your operations. Our impact analysis template is a great place to begin, but we have other great resources to help you build a business continuity strategy, emergency action plan, and more.
If you could use some help getting started, turn to the professionals – our Risk Services specialists have expertise in dozens of industries! Learn more about how risk management can help you mitigate business interruption risks and their consequences.