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Natural disasters, cybercrime and legal conflicts are real threats to any workplace. But many small businesses lack the proper planning and resources, including adequate insurance, to see them through.

By some estimates, one in four small businesses in Canada won’t reopen their doors after a major disaster.

“It is important that small businesses identify the critical services that they need to continue providing during a disruption,” says Helen Williams, Director, Business Continuity Management at RSA Insurance. “I strongly suggest that businesses conduct their own risk assessment, and estimate the likelihood of each type of major threat, as well as the impact of each of these threats on their critical services.”

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For example, she says that many small businesses rely heavily on a single supplier. What would happen if that vendor is cut off because of a severe weather event or other situation? Ms. Williams says it’s prudent for companies to consider sourcing alternative suppliers as a contingency.

Such foresight is only one part of planning. While all businesses should ensure adequate property insurance coverage, several insurance packages can increase a company’s resilience. Business interruption insurance allows policy-holders to recoup the lost income they would have generated if not for the unexpected event. That can be critical for a businesses operating on tight margins.

Some disruptions shouldn’t be unexpected at all. The Business Continuity Institute’s Horizon Scan 2018 Report names cyberattacks and data breaches as their top two threats.

“I tell my clients it’s not a question of if but when,” says Suzanne Tavaszy, Regional Underwriting Manager (Quebec/Atlantic) at RSA Insurance. She suggests that many small businesses have a false sense of security, believing that cybercrimes only happen to large corporations and multinationals. They can and do happen to any business, of any type and size.

According to a 2017 small business cybersecurity survey by the Ponemon Institute, only 39 per cent of respondents say the technologies they use can detect and block most cyberattacks. What challenges keep their organization’s security posture from being fully effective? The biggest obstacles: not having the personnel to mitigate cyber risks (73 per cent), insufficient budget (56 per cent), and no understanding how to protect against cyberattacks (47 per cent).

Ms. Tavaszy advises small business owners to seek dedicated cyber policies in addition to their property package, in order to bridge the coverage gap related to loss of data.

In the event of an actual or suspected breach, cyber policies cover both business interruption and costs incurred, from IT forensics to communicating with stakeholders.

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“A key feature to look for in a cyber policy is a 24/7 incident response service to help the client assess the breach and dispatch the professionals to resolve it quickly”, says Ms. Tavaszy.

Yet another threat is weather events. These vary across the country, but can affect any business operation. Tornadoes, flooding, severe wind storms and forest fires are just some of the extreme weather events Canadian small businesses have tackled so far this year, notes Anthony Black, RSA’s national catastrophe manager.

According to the Insurance Bureau of Canada, the Canadian insurance industry pays over $1 billion dollars per year on weather-related damages. Storms are becoming more frequent and severe.

“This is the reality. While we can’t control Mother Nature, there are ways businesses can prepare for these extreme events by protecting their operations and assets,” says Mr. Black. “You can never plan too much.”

To do so in small businesses, having a specific person or department dedicated to risk management, may not be realistic. Mr. Black says an executive at the company should consult with their insurance broker who can offer this type of service to ensure their company is protected and remains viable during a catastrophe.

“Your broker can walk you through the types of coverage available and tailor it to your specific needs,” he explains.

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Along with natural disasters any business can get caught in another type of storm, of the legal variety. Small businesses typically don’t have in-house legal resources. Lawsuits and other legal conflicts can be costly, from both financial and reputational standpoints.

Recognizing this, RSA now offers a legal assistance program, by phone, to its small business property and casualty insurance clients. A team of third-party legal experts can provide insight into matters involving regulations, fraud, contracts, injuries, property damage and more.

The range of business disruption threats underscores the need for proper continuity planning and coverage, says Ms. Williams. As with other types of insurance, she says “You hope you will never have to use it, but if you do you will be glad you have it.”

Telephone Legal Assistance service is provided on behalf of RSA by Assistenza International

Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.

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