Business as (un)usual – Getting back to normal after a serious incident

If your practice was flooded and you weren’t able to access or operate from the premises, what would you do? If you don’t know, it’s important you begin analysing the risks affecting your practice and how to plan for their occurrence.

Business Continuity and Risk Management

The Government has produced a Business Continuity Management Toolkit aimed at small and medium organisations that guides you through the steps needed to identify those parts you can’t afford to lose – such as information, stock, premises, staff – and planning how to maintain these if an incident occurs.

At the very least, begin to consider the threats to your practice. These include:

• Property damage – fire, break-ins and flooding (whether from an external source like a river or an internal source like a burst pipe)
• Equipment breakdown – including specialist, diagnostic and IT equipment
• Staff absence – including the death or serious illness of an employee
• Supplier failure – do you have stocks to cope with delays?
• Cybercrime – conducting activity online is a risk, especially when holding sensitive medical records
• Medical malpractice and professional liability claims – a significant distraction to the running of a practice
• External issues – from power cuts to closure of your car park, what else may affect your practice?

Then, rate how likely that risk may occur and its impact if it did; note who would be affected; compile a list of contact details of all organisations and people who will need to be contacted (such as staff, suppliers, landlord, insurers, utility companies, local council, CCG, LMC and local tradesmen like plumbers, electricians, glaziers, locksmiths, alarm engineers etc); then devise contingency plans to cope with the incidents.

Business Interruption protection

Flooding is one of the most common causes of business interruption in the UK and it may take months to recover. Making plans now, rather than waiting for incidents to happen, means you will be able to get back to normal as soon as possible.

To support you during this difficult time, a Business Interruption (BI) insurance policy can provide peace of mind that the practice can continue by covering the loss of income after a disaster-related closing or the re-building process. Its intention is to restore your practice to the same financial position as if the loss had not occurred (subject to policy coverage and the terms and conditions of the policy).

It is frequently included within Practice or Surgery Insurance policies but check this is the case with yours.

Beware of Under-Insurance

Under-insurance is the difference between the sum declared to represent the value of the subject matter insured and the value established at the time of the claim.

Research carried out in 2012 by the Building Cost Information Service, part of the Royal Institution of Chartered Surveyors, found that 80% of commercial properties are underinsured with average shortfalls of 60% per property. In similar work, the Chartered Institute of Loss Adjusters found that 40% of business interruption policies are underinsured with the average shortfall being 45%.

If your practice is under-insured, even in partial losses, you may be deemed to be carrying some of the risk yourself and the insurer will require the practice to pay a portion of the claim. To prevent this, it’s a good idea to get a regular, professional valuation of your property. Also, check whether your accountant’s figures for gross profit match those defined in the policy as information required by insurers is often expressed in different terms.

Cyber Insurance – Can you hack it?

Many businesses are including Cyber Insurance as part of their contingency planning to cover losses relating to the effects of cyber-crime or a systems failure.

If you suffer a cyber breach, having insurance can make the recovery process as straightforward and rapid as possible. In-depth technical knowledge is beyond most people, so policies generally include significant assistance with and management of the incident itself, which can be essential when faced with reputational damage or regulatory enforcement.

Test, Review, Amend

Once you create a Business Continuity Management Plan and everyone knows their responsibilities, consider testing how the practice follows the plan and copes with a (pretend) incident. Review how effectively the plan worked and how to improve it.

One Final Thought

Don’t forget to think about where you store any Plans. Keeping a sole printed copy in an office filing cabinet that may be underwater in a flood defeats the purpose! Keep printed copies offsite as well as backed-up in cloud-based storage services like Dropbox, Google Drive or Microsoft OneDrive.

Our approved supplier, MIAB, can assist members with advice about their range of insurance products – visit their supplier page for more information.