HARTFORD, Conn.--(BUSINESS WIRE)--Most midsize businesses have business continuity plans but few have tested them, according to The Hartford’s survey of midsize business owners and C-level executives. This shortcoming presents potential risk for businesses, which may be unable to meet client needs due to an interruption in their operation or lose revenue due to a supplier issue.
While the majority of midsize businesses (59 percent) surveyed had a formal, documented continuity plan, one-third (33 percent) had an informal, verbal plan, and 8 percent reported having no plan at all. Just 19 percent of businesses had tested their plan.
“Weather-related events, fires, thefts and supplier interruptions are just a few of the issues that can impact a business,” said Eric Cannon, assistant vice president of property underwriting at The Hartford. “While many midsize businesses have taken the important step of developing a formal continuity plan, testing and updating that plan on a regular basis can mean the difference between a business’s ability to recover quickly versus being unable to meet client needs.”
The Hartford survey found that more than one-third (36 percent) of midsize businesses had been unable to meet a client need due to an interruption in their operation, putting their relationship with that client at risk. Of those businesses:
- A majority (57 percent) used an alternate supplier and avoided any direct impact on their clients.
- 39 percent lost business to other suppliers but had clients return once their business resumed operations.
- 9 percent lost clients that did not return.
Role of suppliers in continuity planning
Most midsize businesses surveyed (84 percent) rely on suppliers, vendors or consultants. Four in 10 had suffered a supplier interruption and almost one-third (32 percent) had lost revenue due to a supplier problem.
“Even the smallest vendor or that vendor’s supplier can impact a business’s ability to meet its customers’ needs. The savvy business owner must take the time to understand the continuity plans of its suppliers and their suppliers in order to fully know who is at the table and who can step in when back-ups are needed,” said Cannon. “It is also important for business owners to speak with their insurance agent about their continuity plans and business interruption coverage.”
Cannon discusses business continuity planning and suppliers at www.thehartford.com/midsizemonitor.
For information about business continuity planning, visit http://www.thehartford.com/business/disaster-planning-for-businesses.
To download a business continuity plan worksheet, visit http://www.ready.gov/sites/default/files/documents/files/BusinessContinuityPlan_0.pdf
The Hartford’s 2014 Midsize Business Monitor was fielded from September 16-23, 2014. More than 500 owners and C-level executives of midsize businesses headquartered in the U.S. with annual sales or revenues of $10 million to $1 billion participated in the online survey, which had a margin of error of +/- 4.3 percent at the 95 percent confidence level.
About The Hartford
With more than 200 years of expertise, The Hartford (NYSE: HIG) is a leader in property and casualty insurance, group benefits and mutual funds. The company is widely recognized for its service excellence, sustainability practices, trust and integrity. More information on the company and its financial performance is available at www.thehartford.com. Join us on Facebook at www.facebook.com/TheHartford. Follow us on Twitter at www.twitter.com/TheHartford.
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in our 2014 Annual Report on Form 10-K, subsequent Quarterly Reports on Forms 10-Q, and the other filings we make with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
From time to time, The Hartford may use its website to disseminate material company information. Financial and other important information regarding The Hartford is routinely accessible through and posted on our website at http://ir.thehartford.com. In addition, you may automatically receive email alerts and other information about The Hartford when you enroll your email address by visiting the “Email Alerts” section at http://ir.thehartford.com.