A question that’s sometimes asked of the business continuity manager is “will our business continuity plan get us a discount on our insurance premiums?”.

Sadly, the answer is almost always “no”. It might help you get cover in the first place, as some insurers may refuse to provide certain types of insurance without evidence of a robust risk management and/or business continuity capability, but it’s quite rare (though not completely unheard of) to get a significant discount just because you have a business continuity plan.

However, your business continuity plan or, more to the point, your business continuity capability, might work to your advantage in other ways. Because it should help you to understand what levels of cover you need, particularly on your business interruption insurance.
A robust business continuity capability could reduce your potential losses and enable you to get back to normal quicker, in which case you might save money by choosing a lower level of cover in the form of a shorter indemnity period and/or a reduced level of insured losses.

There’s a big fat caveat, however, that you ignore at your peril. You need to have complete confidence in your business continuity capability, which, as we’ve discussed previously, isn’t the same as merely having a business continuity plan. But, of course, you do anyway – don’t you?