Disaster preparedness – Business continuity
While making a presentation about recovering from disasters to the Association of Legal Administrators national conference for financial issues, (see my latest book, Disaster Preparedness & Recovery Planning) I listened to another presenter talking about the insurance aspects of disaster. She noted some frightening statistics: More than 40% of all businesses never reopen after they experience a disaster; of those that do open, more than 30% fail after two more years of operation.
Her concluding remarks highlighted the importance of planning – planning to make sure you be able to continue your practice after a disaster. Disasters come in all shapes and colors, from 9/11 to Katrina to broken water pipes upstairs, to the absence of water (in drought areas particularly) where your data center cooling system needs chilled water, and everything in between.
And talking about insurance, check out cyber liability insurance that protects you against claims from clients (disclosure injuries) and third parties (reputation injuries) resulting from your acts. E-business interruption and extra expense insurance (analogous to business interruption insurance may protect you against fraudulent access or transmission. Insurance coverages that do not cost a lot to maintain but can save you millions of dollars if found liable.
Another insurance coverage that I had not heard of before is something every law firm should consider where there are 2 or mor lawyers of equal prominence … Management liability insurance. Claims by partners for the negligent management of the firm and compensation disputes by partners against the firm. Claims usually occur where there is the loss of value in a lease, bankruptcy of the firm and/or the loss of a valuable office lease by the executive committee, or a merger-acquisition with some members left out.
While most lawyers don’t think about these issues very often, there should be a review periodically, at least annually.Tags: Finance, Management, Marketing