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COVID-19: Ways to Ready Your Organization for Future Disruption


Businesses around the world are dealing with the spread of the COVID-19 as ripple effects from the disease outbreak are expected to continue to impact financial markets, global supply chains and workforce mobility. COVID-19 is not only a worldwide health concern, but also a large concern for the global economy.

Pandemics aren’t a typical type of business disruption. The benefits of proper organizational and disaster preparedness planning include:

  • Minimizing staff impact
  • Minimizing supply chain impact
  • Minimizing service delivery impact
  • Minimizing IT infrastructure impact
  • Protecting corporate reputation
  • Reducing financial impact
  • Enabling the organization to return to normal sooner

The uncertain timeframe of disease outbreaks means security and risk management leaders should have short- and long-term plans in place for protecting employee health, assessing third-party exposure and ensuring continuity of business operations.

Below are several areas organizations should review in the face of this disease outbreak and the economic uncertainty that comes with it. These items can also be helpful in preparing for other emergency situations.

Crisis communication and reputational risk

A crisis communication plan in the case of an emergency helps organizations prepare for reputational risk as well as confusion among employees, leaders, stakeholders and clients. It also helps bolster customer confidence and retention. These plans can help guarantee information is released quickly and that there is a consistent message across all organizational platforms.

Organizations should have a plan that outlines:

  • Who the primary and alternate leaders are in each area of the business
  • Who has the authority to make final decisions
  • Guidelines on communication methods
  • Notification procedures within the organization
  • Guidelines for who will handle contact with the media, the public and any other valuable stakeholders

Disaster recovery plans and IT capabilities

You may need a disaster recovery plan to facilitate a quick, smooth return to normal operations. A disaster recovery plan helps businesses anticipate IT infrastructure needs. It proceeds from an understanding of IT services your business depends on and can help you design preventative controls, contingency plans, emergency mode operations and recovery procedures.

Technology can help organizations better prepare and adapt to the changing situation. Businesses should review their policies and capabilities for remote work in the case that employees must work from somewhere else that is not their usual location. Organizations should ensure that employees who work remotely are able to access the necessary systems and data, technical capacity can handle a spike in remote use, and IT support teams are in place for remote users.

Internal controls

In the wake of a disease outbreak, businesses need to evaluate their own internal systems, as well as assess how the crisis affects their processes and procedures. If your environment is a traditional in-person business, considering how a remote work force impacts your control structure is key to maintaining a sound internal control environment. Updating policies and procedures to allow for a flexible work environment is key to the longevity of maintaining sound internal controls in disruptive times.

Business processes and supply chain

During a crisis, organizations must determine which processes are critical to continue operations and which processes can be suspended temporarily. It’s also imperative to understand what resources are required to support critical operations.

Supply chain pandemic preparedness is critical. Businesses should think long term to evaluate their supply chains, ensuring that future access to raw materials, components and finished goods will not be impeded by another crisis. Organizations that limit supply chain exposure by broadening their range of suppliers will be less affected but not immune to the impact of a large-scale supply chain disruption. There is potential for high uninsured loss of revenues caused by delays in the trade flow disrupted by a pandemic.

Supply chain processes are the backbone of any company’s cash flow, and a solid cash reserve can help you stay afloat during supply chain crises. Understanding working capital, cash flow, and the impact it can have on your supply chain can make the difference between a resilient business and one that struggles in the face of crisis. It’s important to take measures now to reduce future risks from any region in the world.

Business continuity plans

business continuity plan significantly improves an organization’s resilience. An organization should determine the resources necessary for its operations, how quickly they need to be available and then recreate those processes in the business continuity plan. The areas typically covered include human resources, facilities management, communication systems, information technology, infrastructure resources and media relations.

What will your organization need to survive? The list might include the capability to meet with clients, customers or stakeholders virtually; access to client information; specialized equipment and technology; processing software; avenues of communication; assistance for and availability of your workforce; etc.

During and after a crisis, your organization’s needs may be more extensive and include communicating assurances to clients, customers, suppliers and employees. Businesses should also identify vendors associated with critical business operations, identify potential substitute vendors and develop schedules that build in expectations of potential vendor delays. A well-drafted and tested business continuity plan provides peace of mind when a crisis occurs and allows you to start acting on a plan immediately.

Insurance to cover losses

Losses related to COVID-19 could be covered under insurance, but the circumstances and policy language are key. While it’s not impossible, it is unlikely that most insurance policies will cover losses related to the disease. Many factors affect whether a loss would be covered under insurance, including the type of loss, the type of coverage, and the terms and conditions of specific policies.

Business interruption losses are often difficult to evaluate, and reimbursement may be complex to understand. Insurance policies often cover accounting fees for loss adjustment expenses, so using an insurance consultant may not cost a penny for the insured. An insurance consultant can help with claim submittal and representation, quantification of the lost profits damages, settlement review, policy review and more.

It's uncertain how long businesses may have to delay operations, but lost customers, clients and revenue are possible. Planning for potential brief and long-term interruptions to operations can be crucial to an organization’s continued success.

To learn more about how to prepare your organization to face the operational risk associated with COVID-19 impact, please contact a member of our Advisory Services practice.

Click here for detailed guidance from The Centers for Disease Control and Prevention (CDC) on how businesses and employers can prepare and respond to the COVID-19 outbreak.


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