Page 131 - RISK Management IC 86

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emergencies and equipments necessary to handle the
emergency. Severity of business interruption may not be
directly linked with the extent of property damage. So,
while preparing a contingency plan, the first steps would
be to identify:
(i) all potential loss producing events which may disrupt

operations.
(ii) interdependencies between different parts of

organization itself.
(iii) dependencies upon individual suppliers or

customers.
(iv) alternative sources of supply or outlets where any

of the dependencies exist.

Sometimes it may be feasible to make some changes
immediately to reduce the potential impact of loss on the
business or reduce the vulnerability of the business, e.g
duplication of key items of plant, holding larger stocks
of raw materials, etc.

The management then has to balance the extra costs with
the potential loss, and accordingly take the decision. The
actual contingency plan should deal with proposed
response to loss situations.

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