Is your small business prepared if a natural disaster, equipment malfunction or other unforeseen event disrupts daily operation? A Continuity of Operation Plan (COOP) analyzes your business, identifies critical resources and personnel, finds weaknesses, and outlines contingency steps so your company can continue operating.
Do a Business Impact Analysis
Start your COOP by doing a Business Impact Analysis (BIA). A BIA strips operations down to the absolute necessities your business needs to keep running. Consider personnel, cash flow, production or service delivery, ordering and distribution as you identify those essentials.
Assess the Risks
After you identify your company's critical functions through the BIA, list risks, threats and hazards specific to your location and industry. Risks could include tornadoes, hurricanes, floods, equipment failure, cyberattacks or sudden illnesses of key employees.
Use that risk list to build contingency plans for worst-case scenarios so your business can remain operational. For example, if you rely on two heavy machines stored outside, arrange an alternate nearby storage plan during hurricane season so equipment is protected and available after the storm.
Plan for Resiliency
Resilience requires planning. Depending on your BIA, consider actions such as cross-training staff, decentralizing key tasks and backing up critical data daily to reduce recovery time.
- Cross-train employees to cover necessary duties if key people are unavailable.
- Decentralize operations of critical tasks so parts of your business can keep running.
- Have an alternate location on call if you cannot access your primary building.
- Back up critical data at least once a day to prevent loss.
- Store important records offsite or online to reduce the risk of total loss.
- Keep an up-to-date contact list for key employees and customers, accessible any time.
- Protect equipment or arrange for backup equipment if yours is damaged or inaccessible.
- Maintain an emergency financial account to cover operations if regular accounts are unavailable.
Your insurance professional can help you translate your COOP needs into appropriate coverage, including industry-specific policies such as Business Continuation Insurance.
Depending on your operation, specialized policies may apply; an insurance review can identify options like coverage tailored to particular facilities or equipment, for example Grain Elevator Operations Insurance when relevant.
When preparing your COOP, talk to an insurance professional who can help you create a comprehensive list of threats and a recovery plan—or talk to your insurance agent to review options that match your business.
Frequently Asked Questions
What is a Continuity of Operation Plan (COOP)?
A COOP is a written plan that identifies critical business functions and details how to maintain or restore them after a disruption.
How often should I update my COOP?
Review and update your COOP at least annually or whenever you have major changes in staff, operations, technology or supply chains.
Who should be involved in creating a COOP?
Include leadership, department heads, IT, HR and key employees who understand day-to-day operations and dependencies.
Do I need special insurance as part of continuity planning?
Insurance can be a critical part of recovery; discuss coverage options with an insurance professional to match policies to your risks.