Toronto flash floods: What businesses need to take away

Law360 Canada (July 19, 2024, 3:05 PM EDT) --

Michelle Ann Zoleta

The rainstorm that affected many across the city this week was a big wake-up call for businesses. Whether it was the power outages or ensuring your staff got home safely if they were required to leave the office, employers felt the impact.

The biggest takeaway from this storm is that businesses must have a contingency plan in place. Without one in place, businesses can find themselves unprepared and vulnerable, leading to operational and financial damage.

A well-designed business plan allows businesses to be proactive by identifying potential risks and outlining strategies to mitigate them. Think of it as a “plan B” in case any unforeseen events take place. It’s a plan that clearly outlines how staff and leaders should react if there is something that interrupts the normal flow of business.

By preparing for various scenarios, whether it’s flash flooding, power outages or public transit disruptions, companies can ensure continuity of operations, protect their assets and maintain customer/client trust.

When putting together a contingency plan, it should typically include the following:

• Risk assessment: Identifying potential threats and the impact it could have on the business.
• Emergency response: Establishing procedures for immediate action. For example, once a power outage hits, some companies ask their in-office staff to go home and continue working from there.
• Business continuity: Developing strategies to ensure business operations remain functional. This could be very costly if not done properly.
• Clear communication: Ensure there is clear communication with staff; it could be a very stressful situation for some.
• Recovery plan: Outlining steps to restore normal operations as quickly as possible.

Contingency plans are good for various reasons. This includes:

• Minimizing panic: Responding to a challenging or stressful situation requires people to be able to think clearly. Having a plan in place will give staff a clear direction outlining the proper way to proceed in any emergency situation. Rather than coming up with a solution on the spot, everyone can react quickly and safely to the situation at hand.
• Reduce operational loss: Unexpected events can halt company operations and even lead to lost revenue. A contingency plan can prevent operational disruptions by ensuring that workflow continues as seamlessly as possible.
• Areas of improvement: It’s a good way to look for other areas of the business that may need attention and improvement. By creating a contingency plan, it can help businesses take note of their needs, opportunities, resources and weaknesses.
• Enhances trust in your business: A contingency plan shows that your business is prepared for any unexpected events that may come your way. Clients and customers can seek comfort knowing that their business data is protected and not put at any risk because of how well-prepared the business is.

How to develop a contingency plan:

1. Identify potential risks: Brainstorm possible scenarios that could impact your business such as natural disasters, cyberattacks or power outages. Evaluate the potential impact and likelihood of each identified risk to prioritize planning efforts.
2. Establish roles and responsibilities: Assign specific roles and responsibilities to team members who will be involved in executing the contingency plan. Make sure to define clear reporting lines.
3. Develop response strategies: Outline step-by-step procedures for responding to each identified risk. This should include immediate actions, communication protocols and recovery steps. Ensure the necessary resources such as backup systems and contact lists are available and easily accessible.
4. Communication plan: Develop a plan for keeping employees informed during an emergency, including methods for distributing information and maintaining contact. Have guidelines prepared for communicating with clients and customers.
5. Regularly review and update: Review and update the contingency plan to reflect changes in the business environment, operations or identified risks.
6. Documentation: Create a detailed written document of the contingency plan, including all procedures, contact lists and resource inventories. And make the plan easily accessible.
   

Michelle Ann Zoleta is Health and Safety Advice manager at Peninsula Canada.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

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