Business disaster planning

An unforeseen disaster could cause a Maryland business to temporarily shut down and lose profits. For some businesses, unpredictable closures can be so financially devastating that they are never able to reopen. When a company stops operating, contracts that it had with suppliers, customers and business partners could end up being breached.

Preparing for unforeseen disasters is an important part of business planning. A legal concept called ‘force majeure” is often worked into business contracts as a clause that excuses parties for lack of performance during widespread and unpredictable events like wars, nationwide strikes and hurricanes. However, ensuring that force majeure clauses are included in contracts is only a small part of business disaster planning.

When a disaster causes a business to shut down, the closure often has a domino effect on other parties that rely on the business to stay open. That’s why many companies will only work with suppliers that have a business continuity plan in place. Companies may also take out business interruption insurance or require suppliers to have this type of insurance before working with them. As an essential part of business planning, owners should address the important topic of planning for unforeseen cybersecurity breaches or computer crashes.

A business owner who is working out contracts with new partners or suppliers may want to have representation from an attorney who has experience in these types of matters. An attorney may be able to review the contract to make sure that it includes a force majeure provision and other important clauses. If a business owner is facing repercussions from a contract breach that was caused by an unforeseen disaster, legal counsel may be able to assist in this area as well.

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