Business Continuity Risk: Are You Asking the Right Questions?

Your organization’s ability to weather disruption doesn’t depend solely on your internal business continuity plans. It also hinges on the resilience of your vendors.

If a key supplier or service provider can’t recover quickly from a crisis, your operations could grind to a halt. Understanding how their business continuity plans align with your needs can make all the difference when the unexpected happens.

Questions to Ask Yourself

Ask yourself these questions to help determine who your critical vendors are—the ones that can have a major impact on your business if they are unable to sufficiently operate after a business interruption:

• Which vendors will have the biggest impact on the company if they suffer an interruption? How quickly will the impact occur?
• How are my most critical vendors involved in my recovery strategy?
• What interruptions are most likely to occur that could threaten my critical vendors?

Questions for Your Critical Vendors

Many businesses simply run through a checklist of questions when vetting their vendors. Instead of using general criteria, ask questions that relate directly to the specific products and services your vendors provide for you. Assessing the quality of your vendors’ recovery capabilities in areas important to your own business continuity will help you the most in this process.

The following questions will help you better understand your vendors’ real business continuity risks:

• What is your recovery plan for the products and services we receive from you?
• What strategies have you put in place to respond to the loss of critical resources for the products and services we receive from you (for example, the loss of your computer systems, workplace, employees or your own vendors)?
• In the last 12 months, have you conducted an employee disaster recovery training exercise with the computer systems needed to provide us with the products and services we receive from you? If so, please share your results.

Understanding your critical vendors’ business interruption resiliency and recovery capabilities will help you feel more secure doing business with them. For information about business interruption insurance and more ways to reduce risks, contact Hylant.

The above information does not constitute advice. Always contact your insurance broker or trusted advisor for insurance-related questions.