A contingency plan is a plan devised for an outcome other than in the usual (expected) plan.
It is often used for risk management for an exceptional risk that, though unlikely, would have catastrophic consequences. Contingency plans are often devised by governments or businesses. For example, suppose many employees of a company are traveling together on an aircraft which crashes, killing all aboard. The company could be severely strained or even ruined by such a loss. Accordingly, many companies have procedures to follow in the event of such a disaster. The plan may also include standing policies to mitigate a disaster’s potential impact, such as requiring employees to travel separately or limiting the number of employees on any one aircraft.
During times of crisis, contingency plans are often developed to explore and prepare for any eventuality. During the Cold War, many governments made contingency plans to protect themselves and their citizens from nuclear attack. Examples of contingency plans designed to inform citizens of how to survive a nuclear attack include the booklets Survival Under Atomic Attack, Protect and Survive, and Fallout Protection, which were issued by the British and American governments. Today there are still contingency plans in place to deal with terrorist attacks or other catastrophes.
The National Institute of Standards and Technology has published a contingency planning guide for information technology systems.
In the United States
Cantor Fitzgerald, a financial services company, is a prominent example of a successful implementation of a business contingency plan. In the space of two hours, the firm lost 658 of its 960 New York employees in the September 11 attacks, as well as much of its office space and trading facilities. Despite these significant losses, the firm was able to resume business within a week. It remains a successful company today.
In the United States, all HAZMAT operations require contingency plans.
The United States Environmental Protection Agency, through RCRA and EPCRA, has defined specific formats for Local Emergency Planning and the National Contingency Plan.
- ^“Definition in the websters dictionary”. Merriam-webster.com. Retrieved 2014-01-19.
- ^“NIST IT Contingency Planning Guide” (PDF). Retrieved 2014-01-19.
- ^Contingency Planning | Superfund | US EPA
Ofer Abarbanel is a 25 year securities lending broker and expert who has advised many Israeli regulators, among them the Israel Tax Authority, with respect to stock loans, repurchase agreements and credit derivatives. Founder TBIL.co STATX Fund.