Insuring continuity
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Insuring Continuity. Integrating the BC Program with Traditional Insurance. Session Objectives. Discuss types of insurance relevant to BCM programs Demonstrate how BCM can benefit from insurance programs Demonstrate how insurance programs can benefit from the BCM program.

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Insuring Continuity

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Insuring continuity

Insuring Continuity

Integrating the BC Program with Traditional Insurance


Session objectives

Session Objectives

  • Discuss types of insurance relevant to BCM programs

  • Demonstrate how BCM can benefit from insurance programs

  • Demonstrate how insurance programs can benefit from the BCM program


Insurance overlap with bcm

Insurance Overlap with BCM

  • Business Interruption

  • Property

  • Directors’ and Officers’

  • Workers’ Compensation/General Liability

  • Professional Liability


Insuring continuity

Business Interruption Insurance

  • Business Interruption Defined:

    • Thesaurus Legend: Noun 1. business interruption insurance - insurance that provides protection for the loss of profits and continuing fixed expenses resulting from a break in commercial activities due to the occurrence of a peril

  • Business Interruption Purpose:To protect the earnings of the insured and do what the insured would do for itself had no loss occurred.

  • Business Interruption:“Net Profits Plus Continuing Expenses” or “Gross Earnings less non-continuing expenses”


Insuring continuity

Section 1: BI Program Design

Business Interruption Coverages

Services Overview


Insuring continuity

Section 1: BI Program Design

Business Interruption Basics

Services Overview

  • Types of policy forms

    • ISO Filed Forms

    • Manuscript/Broker Tailored Form

    • Propriety/Insurance Company form

  • Basis of coverage:

    • Gross Earnings: “Gross Earnings less non-continuing expenses” or

    • Net Profits: “Net Profit plus continuing expenses” or

    • “Reduction in Turnover less change in standing charges.”

  • Conditions:

    • Covered cause of loss

    • Covered location

    • During period of indemnity

    • Mitigation

    • Actual loss sustained


Insuring continuity

Section 1: BI Program Design

Services Overview


Insurance can help bcm

Insurance can help BCM

  • Cash to implement strategies

    • At time of disaster or execution portions of staged strategies

    • Contingent coverage

  • Current risk information

    • Basis for MFL/PML

    • Exposures revealed in BIV analysis


Insurance can help bcm1

Insurance can help BCM

  • Backstop for losses/failed responses

Deductible

Strategy Funding

Self Insurance

Excess/Reinsurance


Bcm can help insurance

BCM can help insurance

  • What doesn’t work:

  • Putting insurance salesmen in your mass notification system


Insuring continuity

BCM can cover BI “Gotchas”

Services Overview

Section 1: BI Program Design

  • Earnings loss scenarios which may not be covered by business interruption insurance (sample):

  • Obvious exclusions (strikes, war, flood, etc.)

  • Obscure exclusions (loss of market, no physical damage, consequential losses, etc.)

  • Examples:

  • 9/11 losses with no physical damage

  • Katrina losses – effects on population vs. damage (market)

  • Northeast power blackout of 2003

  • Offshore property exclusion

  • Pandemic

  • Human impact, Loss of Life


Insuring continuity

BCM can cover BI “Gotchas”

Services Overview

Section 1: BI Program Design

  • Earnings loss components which may not be covered by business interruption insurance (sample):

  • Obvious exclusions (BI loss stemming from - mold, flood)

  • Obscure exclusions (loss of market, retraining employees, consequential loss, etc.)

    Examples:

  • Pre-loss excess labor to expedite goods production in advance of loss

  • Mitigation expenses incurred but not utilized

  • Excess fuel costs stemming from Katrina

  • Disaster bonuses, employee tips

  • Broader market impact

  • Excess bad debts stemming from Katrina


Actual example of bcm helping insurance

Actual Example of BCM helping Insurance


You know you might need a professional biv if

You know you might need a professional BIV if…

  • What to include as a deduction for purpose of getting to gross earnings

    • (avg. daily value deductible or co-insurance reporting)

  • The policy has location based limits based on the BIV worksheet

  • Extended interruption is a possibility for some locations


Questions

Contact me at:

Michael Keating, CBCP

[email protected]

404-575-3843

LinkedIn: http://www.linkedin.com/in/michaelkeating

Questions?


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