Business continuity provides insurance discounts (for some…)

According to a recent survey jointly conducted by Strohl Systems and CPM-Global Assurance, one out of every eight US organisations that responded has experienced decreased insurance rates due to having a comprehensive business continuity plan. Of the 639 business continuity planning professionals who responded to the survey, 12.3 percent said they had received a reduction in their insurance rates due to the quality of their business continuity plan, almost 87 percent said they there had been no change in their rates, and one percent said they had experienced increase rates due to a plan their insurance companies viewed as inadequate.

“The 9/11 Commission recommended that insurers start reviewing business continuity plans,” said Brian Turley, president of Strohl Systems.  “I think this is the first indication that the insurance companies may be taking these recommendations seriously.  Organisations with comprehensive plans should contact their insurance provider to discuss possible discounts in their business disruption insurance rates.”

Overall, when asked what the ultimate goal of their program was, 67 percent said it was to “successfully manage an interruption.”  Fourteen percent said the goal was to build “regulatory compliance or passing an audit” and 13 percent said the goal was to “demonstrate recovery through testing.”

The survey also revealed other interesting facts about how organisations view and measure the value of business continuity planning.  Some of the findings include:

* Only 24 percent of respondents said that they measured the return on investment from their business continuity program;

* 41 percent indicated that they benchmark the state of their program against other organisations in their industry or geographic region; and

* 42 percent indicated that they did not know how much an hour of downtime would cost their organisation.  38 percent said it would cost over $50,000 (US), nine percent said it would cost between $10,001 and $50,000 (US), six percent said it would cost between $1,001 and $10,000 (US) and four percent said an hour of downtime would cost less than $1,000 (US).

The survey was conducted from July 26th to August 10th and included responses from all major industries sectors with 12 percent of the responses coming from outside of the US and Canada.  

The full results of the survey can be found at http://www.strohlsystems.com/MediaPR/TopNews/ShowSurveys.asp?ID=1

•Date: 23rd August 2005 • Region: US• Type: Article •Topic: BC statistics
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