Disaster recovery plans 101
Consider the end before you begin
My accountant once said to me that the only way to properly plan for a new venture is to think about how it will end before you begin. I didn't appreciate the wisdom at the time, so when the end of that venture came, I was confused and stressed.
Nowadays, I've taken that advice to heart, and I encourage everyone to think about what can go wrong as a key strategy.
Thinking about risks saves money, too
I met a white collar consulting firm, who'd been spending $6,500 a year on basic business insurance. The practice was split over two locations, and had 14 staff working on site.
Immediately I could see some opportunities to reduce the insurance spend.
- Reduce unnecessary specialised property insurance
- Embrace remote working
- Alter the business interruption insurance basis of cover
Reduce unnecessary specialised property insurance
In the 90s and early 2000s, it was common for business to insure these newfangled things called computers against electronic derangement. Back then, computer spares were expensive and difficult to obtain.
But often people just continue to renew their insurances year-in year-out without reviewing them regularly. My white-collar consulting firm was still paying $500 a year for unnecessary electronic breakdown insurance. For their particular use case, a replacement laptop would be inexpensive.
And using cloud computing, meant no more requirement for expensive on-premises computer servers!
Embrace remote working
The jury's still out whether a fully-remote workforce is as productive as an all-in-the-one-office together workforce. But one thing Covid-19 taught us that we can still get our work done using online tools.
For this particular client, encouraging staff members to maintain suitable premises at home for work meant that the business had an automatic ersatz business hot site ready at a moment's notice.
Staff could continue working even with a minor cold or ailment, and not take the risk of making anyone else sick.
Alter the business interruption basis of cover
After we worked on the first couple of tips, we realised that the premises themselves weren't critical to business revenue. The client had already split the risk in two by having two sites, but now with remote working and online tools, a disaster at the premises wouldn't stop the business from operating.
So for this particular use case, we could alter the traditional gross profit basis of business interruption insurance to the expedient additional increase in cost of working only. Although this different type of cover isn't suitable for anyone, it was suitable here.
The change in cover saved $2,000.
Managed risks are better risks
With the new view on the business and its risks, I could tell the insurance market a much more compelling story about this client. All up we reduced the $6,500 annual insurance bill down to $3,200.
That sort of saving on insurance isn't unusual, and is the core of what Cleversure can do for you, too.