In view of increasingly serious business interruption claims at large industrial companies, industrial insurer HDI Global SE (HDI) is now providing valuable advice on combatting such risks in a Risk Engineering Guideline.
Natural catastrophes, human error, major fires and the failure of central IT units can paralyse value chains throughout the world from one minute to the next. Production shutdowns and resultant financial losses are the likely consequences. "The financial loss resulting from business interruption is often greater than the actual damage to property that has caused this interruption. We see this situation time and again in our claims analyses," commented Dr Verena Brenner.
She is Head of Central Services at HDI Risk Consulting GmbH, a subsidiary company of HDI Global. "We therefore provide in-depth advice for our customers on how they can make their complex supply chains transparent and protect them against interruptions that could pose a threat to their business operations," said Dr Brenner. Our goal here is to help our customers preserve their production and supply capability even if they have an incident." One important measure for maintaining operational readiness is to build up Business Continuity Management.
Industrial companies are provided with an initial overview in the Guideline for Business Continuity Management produced by HDI Risk Consulting. HDI makes this Risk Engineering Guideline available to companies to download free of charge (link at the end of this release).
Business Continuity Management (BCM) is a management system that enables a company to recover as quickly as possible from serious damage to infrastructure and resources. The system maintains a predefined level of operational readiness in the company even if damage occurs, and the return to normal business operations is accelerated. Ultimately, the effects of an incident are reduced to an "acceptable" level and the company becomes more resilient to incidents at their facilities or within the supply chain.
Prevention takes priority over insurance
"A top priority for us is to give our customers support to analyse and minimise risk. This involves us in offering highly practical advice to achieve cost-effective safety measures," commented Dr Brenner. "Part of the routine work carried out by our risk engineers is for them not simply to analyse production sites and supply chains at the local facilities. We effectively carry out this work across the world. We always operate in accordance with the principle of: Prevention takes priority over insurance!"
The new Risk Engineering Guideline presents the necessary steps to achieve a successful management system in order to maintain business operations. For example, support and involvement of top management is essential to establish a "BCM Culture" within a company. If there is an event involving serious damage, this culture can make the difference between a temporary lean period and the company's failure to maintain its place in the market.
The BCM Guideline from HDI concludes with a checklist. Companies can use this to check progress as they work to establish their Business Continuity Management System.