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Business Interruption Preparation Checklist

September 13, 2019

Business Interruption Preparation Checklist

Synopsis
2 Minute Read

Explore the actions you can take to prepare for a business interruption and the steps you need to know if one strikes with MNP’s pragmatic checklist.

Business interruption is one of the top risks facing Canadian businesses today. Loss of cash flow, inventory and uncertainty — your response determines the future of your company. In this article, we’ll explore the actions you can take today to prepare for an interruption and the steps you need to know if one strikes.

Before A Loss: How to Prepare Your Plan

Ensure your readiness in the event of a business interruption, long before any event occurs. These include:

  • Review your existing insurance policy each year with your broker, analyzing for specific loss scenarios and checking for coverage of professional fees.  
  • Confirm your insurance values with a claims professional and conduct a maximum probable loss study.
  • Assemble a key team of people who understand both the business and insurance coverage, establish communication practices and assign roles and tasks.

After A Loss: Controlling Your Claim

You’ve prepared your recovery plan and now it’s time to execute. Proceed as though you have no coverage at all, as you won’t know what you’ll be able to recover until your claim is complete:

  • Determine how to mitigate your loss (i.e. temporary location, overtime costs, expedite repair, etc.).
  • Track your losses with a detailed accounting of costs.
    • If you use internal personnel to help with repairs, document their hours and tasks.
  • Connect with employees to explain the road ahead and what this means for them.
  • Communicate with suppliers, customers and claims adjusters, informing them about the situation and what they can expect.
  • Actively participate in the reserve setting process to ensure it is completely accurate.

For more information on how to respond to business interruption, contact Craig Burkart, CPA, CA, IFA, CFF, CIP, National Leader, Insurance Advisory, at 403.536.5533 or [email protected] or Gerald Kim, CPA, CA, CBV, CIP, Partner, at 587.702.5995 or [email protected] 

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