What is Business Continuity Planning?
A relevant business continuity plan is a living document which is reviewed at least annually and tested periodically. It is a documented strategy for avoiding or minimising adverse impacts on your business operation should a disaster or failure occur. For museums and visitor attractions, whose work often involves public access, valuable collections, and scheduled events, downtime can lead to significant operational and financial consequences.
Business continuity planning isn’t just for major corporations; it is essential for cultural institutions too. The main risks museums face is fire, flooding, power outages, cyber-attacks and staff shortages and a strong plan can help minimise disruption to visitors, protect income, and safeguard your reputation.
Is your current plan fit for purpose?
We would encourage museums to review their existing plans regularly. Key points to review and update would include;
- Temporary relocation: Do you have arrangements in place to move operations to an alternative site if needed? This could include transferring events, storage, or exhibitions.
- Collections prioritisation: Which exhibits are most critical to protect or restore first? Maintaining an up-to-date inventory of items, ordered by importance or irreplaceability, can guide urgent decisions.
- Communications strategy: How will you manage messaging during a crisis? Having access to PR support and a
pre-drafted communications plan can help manage public perception and stakeholder trust. - Staff training and clarity: Are all staff aware of the plan and their role in it? Regular drills and updates ensure the team knows what to do when it counts.
Business interruption cover
Business Interruption can cover loss of income or profit, should insured damage be incurred hampering operations. Careful consideration is required to this sum, which differs to the accounting version and must be accurate to avoid the pitfalls of underinsurance.
In addition, covers to provide indemnity for additional costs can be insured, known as ‘Increased Costs of Working’ and ‘Additional Increased Costs of Working’. Whilst the former needs to be economic (i.e., you have to spend a pound to save a
pound) to mitigate lost income, the latter cover isn’t subject to an economic test and can provide funds for costs such as PR management.
There are also key extensions available to this cover which can be bespoke to the operations of a museum, such as loss of attraction following an incident nearby, or loss of utilities.
Considering the indemnity period
Another consideration is the period of Business Interruption cover that is required, known as the ‘Indemnity Period’.
In determining a sensible timeframe for your museum or visitor attraction, key considerations include how long it would take to: clear and make safe any damaged buildings, navigate planning permissions for reconstruction (particularly if the building has listed status), a tender process for contractors, and a complete rebuild itself. These timelines also apply to securing and setting up temporary exhibition spaces or visitor facilities, such as modular buildings, which may need to be hired.
Depending on your museum’s location, planning restrictions may also apply to temporary structures—so it’s best to understand these in advance and ensure the right permissions are in place. Supply chain challenges remain significant in the construction sector, and the indemnity period in your policy begins from the date of the incident. If your policy offers less than a 36-month indemnity period, it’s worth reviewing whether this would realistically cover the time needed to fully recover.
Summary
A Business Continuity Plan is critical for museums and visitor attractions to ensure an established plan exists in the event of disruption. If it is adequately reviewed and stress tested, it can reduce the impact on operations and provide much-needed clarity for all.
Business Interruption cover can act as a fundamental part of a Business Continuity Plan. In its simplest form, insurance cover is an act of risk transfer to put a museum in the same place as if a claim didn’t occur. Cover can be arranged on a bespoke basis to provide financial indemnity in the event of insured damage to achieve this. Working with a specialist broker well-versed in the risks associated with the sector will ensure that the level and basis of cover is suitable, working in conjunction with a Business Continuity Plan.
For more guidance on Business Continuity Planning or Business Interruption insurance, speak with your insurance broker or get in touch with the specialist Hayes Parsons team.
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