The Business Continuity Institute has published a report which records the outcomes of a roundtable discussion held in March which set out to ‘establish a common understanding between business continuity practitioners and insurers writing cover for business interruption (BI) insurance on the benefits of a good Business Continuity programme’.
The meeting featured participants from AIRMIC, AXA, Chartered Institute of Loss Adjusters, BCI, BSI, Marsh and Zurich.
The BCI initiated the meeting to establish clarity on five points:
- What is the link between business continuity and business interruption insurance?
- What do insurers look for?
- What difference will a business continuity programme make to the insurance terms provided?
- How should a business continuity manager connect and communicate with insurance buyers in their organization?
- What does the business continuity manager need to do to ensure that the plan is recognised?
According to the report, the meeting concluded that business continuity management could provide benefits in five key areas:
- Business Continuity was seen by insurers as a means to improve the quality of the business they are underwriting and confirmed that Business Continuity helps organizations mitigate impact, recover faster and minimise losses.
- Business Continuity can be used to protect against losses incurred through traditionally noninsurable ‘perils’ such as supplier insolvency or pandemic influenza.
- Business Continuity can be used to better understand the requirements for BI cover (and potentially lower the amount of cover purchased).
- Business Continuity can help get BI cover where otherwise it would not be available.
- Business Continuity can help to secure optimal terms for cover.
More thought and work is required on this last point and insurers have signalled a willingness to continue the discussion in more detail with the BCI.
Click here to read the full report The link between Business Interruption Insurance and Business Continuity