March 02, 2016
Deciding Which Risks to Retain As A Business Owner
In our latest blog series, Donna Childs shares her knowledge with the Datto community. Childs is a disaster recovery expert and founder of Prisere LLC, and has advised Fortune 500 companies in risk management and operational continuity strategies. Read some of her recent posts: Getting Started With Business Continuity Planning and Protecting Business Data By Creating An Inventory Of Key Files And Documents.
As you work to enable your business resilience, you must assess your risk tolerance. What is the magnitude of loss your business could withstand without consequences? Unfortunately, it will never be zero, there will always be some residual loss that you will retain and will be part of your insurance deductible. But let’s work to make that loss as small as possible to enable your business to recover rapidly from disruption. As I suggested in an earlier post, keeping a disaster diary is a valuable asset when you are setting the groundwork for a business continuity plan.
Begin by determining which risks you really don’t need to keep. For example, in areas where you are not an expert, can you retain an outside advisor to assume those responsibilities? This might include outsourcing your technology systems where a managed service provider (MSP) can support your business and remove some stress. Now, how can you work with that partner most effectively? You need to make certain that your key personnel know how to contact your MSP and initiate the work necessary to restore your operations. It sounds simple, but in real life, businesses often overlook this step.
In a disaster, you may not be able to reach your internal IT expert. He or she may be attending to a family member with special needs, or located in an area that is no longer accessible or where power is unavailable. Could you, or someone else if necessary, contact your partner and work productively together to restore operations?
The only risks you should retain are those you cannot transfer in a cost-efficient manner. Finally, have you shared this information with your insurance company? To the extent that you have put in place appropriate practices and procedures, you should benefit from lower insurance premiums as your business represents a better risk! In the next blog posting in this series, I will share some thoughts on how to continuously improve your business continuity planning.