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Insurers look to manufacturers’ continuity plans to cut crises’ costs

By Rick Pendrous , 17-Sep-2007

Insurers increasingly expect manufacturers to have business continuity plans to mitigate the costs of fires and other expensive disasters, according to Northern Foods’ health, safety and environment manager Jackie Wooldridge.

Wooldridge said insurers expected continuity plans to be in place to mitigate the costs of disasters, where lost sales can cost as much as the incidents themselves.

“It’s absolutely critical and it’s certainly something that our property damage insurers are looking for currently, said Wooldridge. “For larger businesses it is a requirement to have these types of contingency plans in place because about half of the claims payout is business interruption. So it is very much focused on ‘how do we get back into business’.”

Wooldridge will describe what happened following a fire , which occurred on July 16 last year at Fletchers Bakery in Sheffield (now owned by Vision Capital), at a seminar on safety and operational aspects of business continuity planning for the food and drink sector.

The event, being organised by Institution of Occupational Safety and Health (IOSH), will take place in Burton-on-Trent on Thursday September 20. Speakers will also include Sainsbury business continuity (BCM) manager Steve Mellish, who will describe a standard for BCM. Other speakers will examine the likely impact of climate change, food emergencies, managing a crisis and involving insurers in your BCM plans.

Speaking about the Fletchers Bakery fire, Wooldridge said: “I got a call saying we’ve got a small fire and another call about 15 minutes later saying ‘maybe it’s not such a small fire and there are fire tenders outside’ - eventually we had about 13 fire tenders. Approximately a third of the building burnt down in the end.”

Following the incident, Wooldridge was involved in a review of how it was managed and how the recovery and return to production was achieved over the following weeks.

“Crisis management is one thing, but business continuity is another and that’s more long term: how you get back into production; how you look at whether you’ve got alternative suppliers or different products and what it takes actually to get back into production,” she said.

“We managed to get back into production in a couple of weeks, which wasn’t bad. But obviously there was a lot of work that we did around contacting suppliers, saying ‘we can’t supply you today, but we’ve got an alternative arrangement with this company’.”

Although continuity plans were in place, Wooldridge admitted that some lessons were learnt - the key ones to do with managing the crisis itself.

“Having a venue that you can go to that is sufficiently far enough away from the plant - not just round the corner - is what you need to think about,” she said. “We moved on a number of occasions and eventually found somewhere that could accommodate the crisis management team and provide facilities for other people.

“It would have been better if we had had that pre-arranged. And also keeping people informed, and making contingency arrangements with local transportation people, because what we did is take those people from the site to somewhere else to work.”

For more details about the IOSH seminar call Everdean Whyte on 0116 257 3178, everdean.whyte@iosh.co.uk