Every business faces potential disruptions – from natural disasters to cyberattacks and equipment failures. Developing and maintaining a comprehensive business continuity and business interruption plan can help minimize downtime, protect your business, and help ensure a faster recovery.

Without a plan, recovery could become lengthy, and businesses hit by catastrophic weather events face the highest risk of insolvency. In recent years, Canada has experienced record-setting insured losses from severe weather, underscoring the importance of proactive business continuity and interruption planning. For instance, major wildfires in recent years have forced entire communities to evacuate, and not every business is able to resume operations quickly once access is restored.

A well-prepared plan allows your business to continue essential operations during unforeseen events and recover more quickly. It provides structure, defines responsibilities, and reinforces confidence among your employees, customers, and partners.

Why business continuity planning matters?

 Business continuity planning helps organizations identify potential risks, assess vulnerabilities, and prepare strategies to minimize loss. A short disruption can lead to significant setbacks, including lost revenue, reputational damage, and operational delays. Your plan should clearly outline how your business will maintain critical functions during and after an emergency, ensuring that communication, leadership, and recovery measures are all in place. Here are five steps for creating your business continuity plan:

Step 1: Conduct a risk assessment and business impact analysis

Start by identifying threats that could disrupt operations, such as severe weather (for example: floods, hailstorms, tornadoes, hurricanes, wildfires, earthquakes, winter storms, etc.), fire, theft, cyber incidents, or supply chain delays. Once identified, evaluate their impact on key areas of your business, including employees, property, technology systems, and essential utilities such as water and power supplies.

A business impact analysis (BIA) helps determine which processes are essential, how quickly they need to be restored, and what resources are required to maintain them.

Consider:

  • Which risks could interrupt daily operations?
  • What would be the impact on revenue and customer commitments?
  • How long could your business survive a total shut down or even a partial disruption before losses become unsustainable?

Step 2: Establish communication protocols and leadership roles

Clear communication is crucial during an interruption. Identify a chain of command and assign specific roles to ensure decisions are made quickly and information flows efficiently. Employees should know who to contact, what procedures to follow, and where to access key information if normal communication channels are unavailable.

Regularly review and update this contact list and structure, especially when there are staff or organizational changes. Include pre-approved internal and external message templates to accelerate response (Public Safety Canada).

Step 3: Safeguard data and technology

Protecting digital assets is critical to keeping your operations running. In 2023, cybersecurity incidents affected 16 per cent of Canadian businesses, and recovery costs have doubled since 2021.

Back up important data regularly and store copies offsite or in secure cloud systems. Implement cybersecurity measures such as multi-factor authentication, firewalls, and endpoint protection to strengthen defenses.

Test your recovery processes periodically to ensure that systems can be restored quickly and effectively after an outage or breach. Document your IT recovery procedures so that they can be easily followed under pressure.

Checklist:

  • Install anti-malware and anti-virus software.
  • Back up critical data to secure servers or cloud.
  • Train staff on phishing and AI-generated scams.
  • Review your cyber insurance coverage.

Step 4: Strengthen your supply chain

Your continuity plan should extend to your suppliers and service providers.

  • Identify vendors essential to your daily operations and assess their ability to withstand disruptions.
  • If possible, maintain backup suppliers or alternative arrangements to reduce the risk of operational bottlenecks if one partner is affected.
  • Maintaining regular communication with vendors can also help you anticipate potential interruptions before they occur.

Step 5: Train, test, and review your plan

A plan is only effective if it has been tested and is understood.

  • Conduct regular drills or tabletop exercises to confirm that employees are familiar with their responsibilities and that procedures function as intended.
  • After each test, gather feedback to identify gaps and update your plan based on lessons learned.
  • Review your business continuity plan at least annually, or whenever there are changes in staff, processes, or technology to ensure it remains current and practical.

Business interruption insurance and top risks

Business interruption insurance is a key risk mitigation tool for Canadian businesses. Interruptions caused by cyber incidents and natural catastrophes are ranked among the top risks for 2025. Policies should address modern threats such as ransomware, utility outages, and climate-related events.

Key risks and mitigation tips for businesses

Natural disasters

Canada experienced $9.2 billion in insured losses from severe weather events in 2024, including wildfires, floods, and storms. Review flood/wildfire exposure, update property and business insurance coverage limits, and pre-arrange temporary sites and vendors.

Checklist:

  • Identify a disaster recovery site.
  • Train staff for emergency protocols.
  • Update insurance policies for climate risks.

Electrical power outages

Extreme weather and grid strain have increased outages across Canada, disrupting businesses during storms and heatwaves. It’s a good idea to either investigate the feasibility of backup generators (and keep electrician contacts handy) or arrange for an adequate alternative facility to temporarily move your operations to.

Crime

Police-reported fraud incidents nearly doubled over the past decade, and cybercrime-related fraud rose 95 per cent since 2019. Business theft and fraud can cause both financial and operational setbacks, making prevention training and security systems essential.

Checklist:

  • Install surveillance and alarm systems.
  • Train staff on security protocols.
  • Enable remote wipe for stolen devices.

Health crises

While rare, health-related disruptions can halt operations. Include hygiene protocols and remote work strategies in your plan to maintain business continuity during illness outbreaks or pandemics.

Checklist:

  • Appoint a crisis coordinator.
  • Maintain flexible work policies.
  • Prepare emergency communication plans.

Protect your business with continuity planning

Creating a strong business continuity plan requires foresight and preparation. Partnering with an experienced insurer can help you identify operational risks, evaluate potential losses, and develop strategies to reduce disruption. To learn more about risk management, visit our Risk Services page today!

This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.