A contingency plan is a plan devised for an outcome other than in the usual (expected) plan.
It is often used for risk management when 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.
Benefits
A contingency plan allows a
business to respond to disasters and threats quickly and deliberately, which
can potentially save time and money. Unexpected events can cause stress or even
panic, which may make it difficult to create level-headed solutions when a
situation occurs.
