COVID-19 and Business Continuity Planning BCP


Glenn D. Denton, Partner

Denton Law Firm

“Those who forget the past are condemned to repeat it.” – George Santayana


Someone recently asked if anyone knew the significance of January 26, 2009. The response was direct. “Of course, it was the ice storm in western Kentucky and so many other states. It was unforgettable.” Many of us recall the ice storm, that specific day, the morning after, the days and weeks after and the challenges to get back to normalcy. For many organizations, the ice storm revealed that their business continuity plan had flaws. Some flaws got fixed. For example, how many generators were purchased and installed after the ice storm? Other flaws did not get fixed. And more importantly, many organizations did not continue to constantly plan and consider what the next potential threat might be.

As a result of the COVID-19 pandemic, Denton Law Firm would like to make the following recommendations to assist public and private organizations when considering business continuity planning. Many business continuity planning concepts remain constant during any disaster, but actual experience can help us fine tune our plans. Herein, we will provide our first five recommendations to perhaps help improve your BCP and protect ongoing operations during a disaster.

  1. Annual Review of the BCP. It goes without saying that an organization should have a written, thoroughly considered Business Continuity Plan (BCP). We recommend that the board should also have a standing board policy that the organization’s BCP be placed on the board agenda for an annual review with real and considered discussion by the board and management. This review should be a part of your executive officer’s annual performance review.

2. Rainy Day Fund. COVID-19 will have real and significant financial effects on individuals, families, partnerships, not-for-profit organizations and for-profit organizations. Those that have saved for a rainy day will be thankful they have those resources. Those that did not will wish they had. We recommend that the board have a discussion about establishing a rainy day fund or emergency fund, establishing protections to define what would permit it to be accessed and how much the fund should have in it. (i.e. 1 month, 2 months, 3 months of operations or payroll, etc.)

3. Business Interruption Insurance Policies. Such policies have existed for years. However, the devil is always in the details. We recommend that every board obtain a full copy of their current policy or policies and then ask your insurance professional to attend a board meeting to discuss the coverages, coverage amounts and exclusions provided. Many policies contain language that will exclude coverage for pandemics, outbreaks and communicable diseases. Which disaster events are covered and which are not? A board should consider that question in advance.

4. Working remotely policy. Many organizations have permitted and effectively used working remotely from home for years. Other organizations have not. COVID-19 is demonstrating why this tool should not only be authorized, but used and tested as the organization sees fit. If your organization is not up to speed on working remotely, COVID-19 is going to help get you there. We recommend that your organization embrace it and incorporate it into your future BCP toolkit.

5. Video teleconference meetings. The boards of many organizations meet in the same place, at the same time and in the same way monthly.  There is little deviation all the way down to the food and drinks or report formats. We recommend that each board direct that at least one board meeting and/or one committee meeting a year be held via video teleconference. Having the technology ready and mastering it in advance is helpful. Frankly, one meeting may not be enough, but it is time to get started.

This will conclude part 1. Our goal will be to keep these short and sweet. While many of the concepts and recommendations provided herein may seem “basic” to some, let us assure you that many organizations out there are struggling with these. At present, we are seeing that many organizations have not saved for a rainy day. Some of our recommendations can be implemented on the fly. One example would be implementing video teleconferencing meetings. However, some of these recommendations cannot. What if you cannot buy the equipment or technology you need right then? Remember the challenges of buying generators during the ice storm? So, let’s learn together and then not repeat it.

If you should have any questions about anything written herein or would like to discuss these items further, please call Glenn D. Denton at Denton Law Firm, PLLC. 270-450-8253. Likewise, if your organization is learning a lesson that you think others should be aware of, please contact us. Be on the lookout for Part 2.