Contingency plan

Contingency plan is what to do if an unplanned event occurs. It can be as simple as asking, “What if…?,” and then outlining the steps to your plan as you answer that question, it is a roadmap created by management to help an organization respond to an event that may or may not happen in the future. And problem that we face Related to this that the Human nature likes to focus on one solution. A contingency plan might not get the attention it needs because people are solely invested in the main action. They want “Plan A” to be successful and feel spending too much time on a “Plan B” could potentially sabotage that success.

We must know that Contingency planning is one response to risk. But in some cases, it may be safer or more cost-effective to tackle it in other ways: to avoid the risk, by investing in new equipment, for example; or to share the risk, by purchasing an insurance policy. Or you may choose not to formally plan for some lower-priority risks at all, but to manage them if they do happen. contingency plan is most use for the risks that low a probability but high impact, so high value of contingency plan is improving the chances of serving high impact such as disaster

Key Points

Contingency plans are an essential part of risk management. They help to ensure that you’ve always got a backup option when things go wrong, or when the unexpected happens.

To develop a contingency plan, first conduct a risk assessment: identify your business-critical operations, identify the threats to those operations, and analyze the potential impact of each threat.

Then, include the following points for each threat:

Scenarios.
Triggers.
Response overview.
People to inform.
Key responsibilities.
Timeline.
To create the most robust plan, consult widely within your organization, conduct trial runs, update the plan regularly, and store it securely.

The following are the key steps in contingency planning:

Note where there are resources that can be used in an emergency. Also, note where in your contingency plan these resources might be applied.
Identify dates that if missed will negatively impact your plan, for example getting approval from a group or committee that only meets every now and then.
Know your contingency plan. Check for any weak links and strengthen them. Identify any slack that you can find in it.
See if you can find points in your plan where alternative routes can be taken, and think through each one’s scenario to add flexibility to your plan.
Use your experience to help you see patterns in your project’s ebb and flow of activity to sharpen your plan.
What do contingency plans consist of?

`plans include the following components:

Event. Describe the event that should trigger your team to enact the contingency plan, being as specific as possible
Response. Explain the strategy that your team should use to handle the situation, including as many steps as necessary
Personnel. Clarify who should be responsible for each part of the contingency plan, listing the person who should be informed as well
Timeline. Discuss what your team should accomplish immediately and on the first day or week of the plan
Developing a contingency plan requires strong problem solving, decision making and critical thinking skills as well as strategic thinking and planning.

Drawing up your contingency plan

Make a list of all the possible risks to your business, however unlikely.
For each of your risks make a note of how likely that risk may occur and the impact it will have it if did occur.
Decide who/what will be affected in each eventuality and how.
Make a list all the people and organizations that you will need to contact in the event of a serious incident with their contact details, e.g. your staff, your customers, your bank, your insurers and your suppliers, as well as details of plumbers, electricians etc.
Identify which risks are insurable and check that you have adequate cover. As well as protection against fire, flood and theft you can also insure against the death or illness of a key person in your business or the legal costs of protecting your intellectual property. Insurance companies may reduce your premium if you have a contingency plan in place.
Minimize the impact of serious incidents as far as possible. Make sure that you have adequate emergency call-out arrangements covering your essential equipment, for example.

Ready to get started? Business contingency plans help you prepare your organization to handle anything unexpected. Give your employees a realistic plan for how they should handle any problem that arises. such as the loss of data, staff, customers, or business relationships. That’s why it’s important to make contingency planning a routine part of the way you work.