If your small contractors or suppliers faced a temporary natural disaster or other factor causing them to close their doors, would they be able to resume business after such a short interruption.
Unless you are confident of their financial health, and know that they have insurance in place to keep them in business in the event of such downtime, you might be surprised.
In a 2010 study Travelers Insurance found that 44% of small businesses operate without any type of business continuity plan.
Consider this, 25% of small businesses affected by a major disruption, even if only lasting a short time period, never reopen their doors.
In contracts with your suppliers or contractors, you may require them to carry business interruption insurance, or you may require a financial analysis before awarding a supplier or contractor a long term job.
But without physically collecting and screening the insurance or other financial documents of the supplier and verifying the accuracy, it is difficult to know whether a vendor is financially capable of staying in business after a disruption, forcing you to switch contractors or suppliers midway through a long project.
BCS performs financial analysis on suppliers and contractors to verify if they have the resources to withstand a large business interruption and stay in business.
Hold harmless language (a/k/a indemnity language) is found in most contracts and agreements, with the purpose of transferring the obligations of one party to another to defend and make whole the other party for legal liability, typically related to the services, work or nature of the contract.