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DISASTER RECOVERY PLANS CRUCIAL TO KEEPING BUSINESS AS USUAL

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LONDON-Having a disaster recovery plan can make the difference between surviving a catastrophe or perishing in its aftermath, experts say.

Disaster plans are crucial for getting businesses back on their feet after a disruptive event and can reduce a company's costs if designed properly, they add.

"The objective (of a disaster recovery plan) is to minimize the consequences and costs of disaster and return to 'business as usual' as soon as possible," said David Cooper, divisional director of Willis Corroon London Ltd. in London.

At the core of any good plan will be ways to handle communication internally and externally and emergency services personnel, said Mr. Cooper.

Within any plan there also should be a system for calling employees to tell them what's happened, where they should report to and when, he said. He recommended a "cascade system," in which two or three people each would call two or three people and so on until all employees are notified.

To ensure the organization is protected, Mr. Cooper also recommended having backups for various parts of the disaster plan.

For example, key personnel may not be reachable by their mobile phone numbers, as the lines may be jammed during a disaster. In this case, it would be appropriate to also have alternative landline numbers to call, he said.

A disaster for a company may come in forms other than a terrorist bomb, a flood or a fire, noted Mr. Cooper.

It could be, for example, that the entire corporate management team caught food poisoning in the company's cafeteria, or all personnel in the computer department caught the same cold and were out at the same time, he said. A disaster recovery plan also should take these types of risks into account.

If a business doesn't have some kind of disaster recovery plan, it is more likely to be hit with significant costs after catastrophe strikes, said Tim Cracknell, senior risk consultant in London with Sedgwick Risks Consulting, a unit of Sedgwick Group P.L.C.

Mr. Cracknell said his firm often works as "facilitators" to get senior managers together to think about a "business continuity" plan.

The managers, he said, should:

Conduct a business impact analysis to see what the company's exposures are, where it is especially vulnerable and what level of losses would hurt the company.

As part of this analysis, he said, organizations also should consider what type of command structure the company wants; who would be on the crisis management team; where the command center would be; and what departmental contingency plans are in place.

Consider strategic backup options.

For example, if a terrorist bomb disabled a company's main headquarters, should it have hot, warm, or cold start sites for resuming its operations, Mr. Cracknell questioned.

A hot start would mean alternative premises-leased or owned-complete with office equipment and backed-up computer data. A warm start would be just having the office equipment, and a cold start would be an alternative office with nothing in it.

Choosing among the alternatives comes down to price and necessity. A hot start facility, for example, can cost as much as 450 pounds($715) per employee per year, but that can drop to 200 pounds ($318) per employee per year the "colder" the start gets, said Mr. Cracknell.

Some banks, for example, own alternative hot sites in case they are needed, but that can be too expensive for many companies, especially for an event that may happen only once every 300 years, Mr. Cracknell said.

A company also may want to determine what percentage of its workforce is needed to maintain operations immediately after a disaster, he noted.

Write up a through description of the plan so there is documentation available for all personnel.

Test the plan through simulation.

Mr. Cooper of Willis Corroon said he recommends contacting the company's crisis team at unusual hours to see if team members respond. "I contact them in the evening to see how many can be contacted," he said.

The Assn. of Insurance & Risk Managers will address these risk management and disaster response issues during its annual conference this week in Warwick, England, said Ina Barker, executive director of AIRMIC.

Such workshops will look at business continuity, crisis management and how to handle the media, contingency management and new ways to deal with business interruptions and document salvage.

Ms. Barker has first-hand knowledge of disaster recovery plans from her previous job as group risk and insurance manager for the former conglomerate Fisons P.L.C., which has since broken up.

Fisons had a two-tiered disaster program, with one designed for the corporate level and the other for the operational level, Ms. Barker explained.

On the corporate level, the plan included identifying the key executives who would communicate with the media and emergency services.

On the operational level, each department and company location had detailed plans on what to do in case of disaster.

A variety of continuity issues were identified in the Fisons plan.

For example, Fisons had a "hot" site for its computer operations in the United States that were vital to the survival of the company, Ms. Barker said. There was a very strict program for backup of computer data, and employee training for the plan and testing of the plan were critical.