BUSINESS STANDARDS
is the quarterly magazine of BSI Group, highlighting the vital role that standards play in today's business environment. Regular features include interviews with leading business figures, as well as news on the latest developments in management systems and standards.
Viewpoint
Question: What impact do you think BCM could have on business insurance in the future?
It is essential that any business suffering a disaster is able to continue as near normal trading in the shortest possible time period to survive. To achieve this, an organization should implement a comprehensive well-tested business continuity plan (BCP) as a first step. Insurance should be viewed as an extension to the BCP process, not an alternative.
Over the last few years, the interest in business continuity management has increased and has been further enhanced by the introduction of BS 25999. With the increase of terrorist activity and natural disasters globally, insurers have been taking a closer interest in business continuity planning and this interest is set to increase.
Effective business continuity planning will have an impact on future insurance costs, specifically business interruption insurance. Where effective BCPs have been implemented to mitigate disaster, there will be a reduced claims experience, which potentially can lead to a reduction in premiums.
Often businesses fail to mention the fact that they have a BCP plan in place and so potentially risk losing out on reduced insurance premiums. BCPs should be presented during the insurance renewal process, along with testing programmes, lessons learnt and continual improvement plans to ensure cost-reduction opportunities are realized.
Whether you are a proponent or opponent of the global warming theory, natural disasters are continuing to occur and are predicted to continue in the future. Oxfam recently released a report that states the number of weather related disasters have quadrupled over the last 20 years and there is no indication of this increase abating.
A comprehensive BCP compliant with the requirements of BS 25999 will continue to be effective in reducing the cost of business insurance.
Steve Crookes, group risk & compliance manager, BSI Group
BCM is the operational response to an interruption, while business interruption insurance (BII) provides the financial response. The better your BCM arrangements, the lower the financial risk, and in principle, the better the insurance terms you can get. Insurers will factor in BCM plans when determining acceptance of risk, the level of cover offered and premiums. The issue for insurers is how to assess how good their clients' BCM arrangements might be. Insurers are increasingly less likely to accept statements that their clients have BCM plans at face value. Compliance and third-party certification to BS 25999 is likely to be accepted by most insurers as the best evidence available, with this standard already a widely accepted statement of best-practice in BCM. Business managers should ensure they strike the correct balance between investment in both insurance and BCM; as getting this right creates confidence in both the resilience of their organization and the efficacy with which they are allocating capital to risk.
Martin Caddick, head of BCM Practice, Marsh Risk Consulting
Business Standards © 2007. Editorial produced by Caspian Publishing in association with the British Standards Institution. Editorial opinions expressed on are not necessarily those of BSI Group or Caspian Publishing. Neither Caspian Publishing nor BSI Group accept responsibility for advertising or editorial content, nor for that appearing on linked third-party websites. Reproduction in whole or in part is forbidden without written permission from BSI Group or Caspian Publishing.
How do you put a price on a brand? An international standard in the making will provide a consistent, reliable approach to brand valuation.
Rising waters: revising PAS 1188
For those living in areas that are prone to flooding, having the right protection resources available is essential. While images of emergency sandbags holding back rivers of water may fill the media, there is a much wider range of products available for flood protection.
While there was a time when companies would never consider working alongside the competition, today's marketplace demands a more flexible approach. Collaboration is fast becoming par for the course. For example, large government contracts often require expertise that goes far beyond any one company's capacity to deliver. Forming a consortium brings together the right experience in the right place, and it can mean the difference between winning or losing a tender.
BSI is planning an informal free lunchtime roundtable in central London on 10 December 2009 to explore how small businesses and their trade bodies can work more effectively with standards. Places are limited so to register your interest or request more information, please email bsi.survey@bsigroup.com or call +44 (0)20 8996 7750.
Sapphire earns a standards hat-trick
Sapphire Energy Recovery, the waste processing and resource recovery business owned by Lafarge Cement, has achieved certification to three management systems standards (ISO 9001 Quality management, ISO 14001 Environmental management and BS OHSAS 18001 Health and safety management) from BSI. Sapphire is the UK's leading processor of used tyres, and sources and manages the logistics of a range of waste-derived fuels and raw materials for the cement industry.
Question: Given the state of the environment, should issues like energy management in business be more regulated and closely monitored instead of voluntary?
Climate change is such an urgent issue that some might argue the only answer to this question is "Yes". However, creating laws that achieve their goals in precisely the right way is challenging and time consuming at the best of times. And when it comes to climate change, the factors involved are varied - too many for any one law or set of laws to cover adequately.
Have a standards-related question for BSI or a comment on the website? We'll find the right person to answer.
