What Does 24 Hours Mean to You? Analysis Leads to Improved IT Disaster Recovery Plan
KMRD’s coverage assessment discovered a limitation in a prospect’s business interruption coverage. KMRD’s approach led to a client taking action to protect itself from a large risk with an improved IT Disaster Recovery Plan.
Risk Identification Starts with Policy
A critical gap in of coverage was discovered enabling a company to take steps to protect itself.
Improved IT Disaster Recovery Plan
A better understanding of the policy resulted in changes to better protect themselves.
KMRD’s Process Identifies What is NOT Covered.
Its critical to understand what risks are NOT covered by insurance.
The Issue
During a coverage analysis exercise, we pointed out how a policy included a 24-hour waiting period before the business interruption insurance triggered. We asked the prospect…
“What does 24 hours mean to you?” He said, “If my business goes down on Monday, my business interruption coverage will begin paying me on Tuesday.”
His understanding was wrong. Their policy defined the word “hour” as a “normal business hour”. In fact, his deductible was three days. This prospect was an Internet-based company which generated revenue revenue seven days a week. 24 hours a day. A three-day interruption could blow an entire quarter’s results.
At the end of the day, we could not negotiate a better deductible. The fact the insurance company was not comfortable with the exposure made it even more clear something had to be done.
Our Response
Our discussion resulted in an exhaustive review of their IT disaster recovery plan. As a result several changes were made to protect themselves from this exposure.
The Results
The improved IT disaster plan helped the CFO to sleep at night.
KMRD’s focus on what is NOT covered by insurance led to better a risk management program. That’s the KMRD difference.