Food & Agri Insurance: Business Continuity Management

18 February 2015

This bulletin looks at the benefits delivered by a robust Business Continuity Management (BCM) strategy and examines some of the practicalities that food & agri companies need to address when putting their plans in place.

Failure to plan

Within the business continuity profession there is an often quoted urban legend stating that “80% of businesses affected by a major incident close within 18 months”. Whilst this is hard to prove categorically, there is no doubt that failure to plan for a response to a critical event will significantly undermine a company’s ability to recover, especially in the food industry. What isn’t in doubt is that those who have developed and rehearsed their response to a major incidents have a much better chance of survival should the worst happen. 

Without a BCM plan, food & agri businesses that suffer a disruption have to explore their options during the crisis when it is difficult to remain objective, prioritise effectively and act efficiently. This leaves them vulnerable and more likely to suffer reputational and financial harm in the face of such an event. 

During a crisis slow decision making processes, the unavailability of replacement machinery and a lack of immediate access to alternative production facilities can be very difficult to overcome.

Focussed Planning

Where a BCM plan is available, businesses can implement preagreed solutions immediately, enabling them to react to a disruption faster and minimise its impact. This improved speed and certainty of response creates big benefits for food & agri businesses, enabling them protect their revenues and reputations whilst retaining their customers and suppliers. It is impossible for businesses to operate with 20:20 foresight and predict every disruption that might arise. It is however possible for them to identify the most likely and the most damaging incidents and to create a plan to mitigate their potential effects. This can seem like a daunting task, but it does not have to be.

  • Do you have a particular brand or product line that your success relies upon?
  • Is there a particular location that is fundamental to its ability to operate?
  • Are there certain pieces of plant and machinery that are essential to maintain production output?

If so, then these pinch points are the first things that a business should focus on and this is a popular and effective strategy. “A lot of businesses in the food and agri sector operate their BCM planning around single points of failure,” says Tim Cracknell, Partner and Head of Consulting Risk Practice at JLT Specialty. “For example, they will pursue a specific piece of business continuity work that will focus on the failure of certain pieces of machinery or utilities.”

This approach lets businesses understand the problems that particular disruptions would create and establish detailed plans that allow them to cope in these specific situations. This work can be done relatively quickly and Cracknell adds: “Typically a whole project would take two to four months, depending on the size of the organisation, from the analysis and organisational arrangements right through to writing the BCM plan so you are then ready to give it some type of a test. We typically follow the ISO standard for business continuity – ISO 22301 – and we make sure we cover all of the steps that it sets out. This includes risk assessment and business impact elements through to the business recovery strategy and plan preparation that you would have to implement to recover.”

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For further information, please contact Jon Miller, Head of Regional Food & Agri Practice on +44 (0)121 676 7806