Posted on 03 May 2013 by Neilson
At a time when extreme weather events are frequently occurring, leaders within the United States commercial real estate industry are largely unprepared to maintain daily business operations according to a recent IndustryEdge survey conducted by Travelers. The results indicate that 57 percent of real estate owners and managers are operating without a business continuity plan.
Perhaps most alarming is that 43 percent of the 200 real estate industry professionals did not consider natural disasters to be an important business issue. The lack of preparation could be detrimental for real estate managers and owners, said Deb Denker, Real Estate Industry Manager, Travelers Commercial Accounts. To survive the increasing number and severity of disasters, real estate owners and managers need a strategic business continuity plan to help minimize downtime, organize a response and deploy the resources needed for a prompt recovery.
Even a minor property loss can impact the ability to maintain a building, while a major event can have a material effect on a company's operation and financial condition. It is easy to see how developing a business continuity plan, testing its effectiveness and carrying proper insurance can be put aside in the rush of everyday operations, but organizations need to look at the long-term vitality of their business and prepare for emergencies and disasters, said Denker. Travelers can help real estate owners and managers through risk control services designed to help them prevent losses from occurring, through broad coverage to respond when a loss does occur, and through expert claim handling to minimize the total cost of a loss.
One example of Travelers value-added risk control services is the Business Continuity Planning Guide. This guide not only helps companies understand basic fundamentals of business continuity and disaster management, it also provides detailed instructions in creating a business continuity plan in four steps:
1. Conduct a Risk Assessment: The overall goal in conducting a risk assessment is to understand the vulnerability of an incident on your employees, customers, vendors, property and operations.
2. Conduct a Business Impact Analysis: The goal of the business impact analysis is developing a list of the functions or processes that are needed for the survival of your business.
3. Develop Prevention and Mitigation Strategies: Prevention and mitigation planning and activities are intended to help prevent a disaster (such as a fire or explosion from unsafe conditions), as well as reduce the impact or severity of a disaster (such as relocating critical equipment to a higher elevation in flood-susceptible areas).
4. Conduct Exercises and Testing: It is critical to test your plan routinely and evaluate its effectiveness, making necessary changes to improve the plan.
A business continuity plan is not a one-shot project. It is an integral part of an effective business strategy. A completed plan should be reviewed, tested and updated regularly if it is to be effective when put into action.
In addition to offering the core lines of commercial insurance such as property, workers compensation, commercial auto, general liability and umbrella, the Travelers IndustryEdge products and services provide specialized coverage for real estate owners and managers and their properties.