A Guide to Contingency Planning

Discover what contingency planning is, its importance, common elements in a contingency plan, and how to craft an effective one for your project or organization.

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What is Contingency Planning?

Contingency plans are the course of action that projects or organizations should take in case of “what if” scenarios or if things go wrong when executing the original plan. Contingency planning refers to creating a proper contingency plan for the organization or the project in case things go south.

These plans are usually customized for the needs of a project or organization. So, just about every contingency plan will look different from the others. On top of that, contingency plans can be both small and large scale. Sometimes, they are as simple as creating data backups while others can be complex and have multiple steps that all members of the team need to execute.


Contingency plans are very important for organizations and projects. As many people will tell you, things don’t always go to plan. Just about every failed organization and bankrupt organization had a strategy that they followed, but the reason that they didn’t come out on top is that they weren’t able to adjust depending on current events.

You never know what can go wrong and when it will happen. Sometimes, things go wrong due to something that the team overlooked. But other times, things go wrong just because of bad luck. And while you can’t control the luck you have, you can make sure that you’re prepared for whatever comes your way.

This is why contingency planning is important. For organizations and projects, a contingency plan ensures that you can deliver and get the task done even if certain things go wrong. This is why these plans must be customized to the needs of the project or organization.

Elements of a Contingency Plan

Every contingency plan looks different. However, each one should have three main elements—protection, detection, and recoverability. These are the essence of a good contingency plan and are things that you need to ensure are in yours, whether you’re making one for an organization or a project team. To give you a better idea of how to craft an effective contingency plan, let’s take a closer look at each of these elements.


This refers to making sure that everyone is safe in case things go wrong. When crafting a contingency plan, it’s important to ensure that everyone has adequate protection in case of “what if” scenarios. This is particularly important when working in the construction or manufacturing industry, as mistakes can be costly in terms of worker safety.


This deal will make sure that there’s a proper way of detecting threats and problems as they arise. This also means determining what the threats to your original plan and strategy are. That way, everyone on board remains in the loop and knows what to look out for when inspecting and conducting operations.


This refers to the organization’s or project’s ability to bounce back in the event that something goes wrong. No matter how prepared you are, there are things that can affect your output or set you back only our timeline. A proper contingency plan should allow you to recover from any setback and get to regular operations as soon as possible.

Examples of Contingency Planning

As mentioned earlier, it’s important that contingency plans are customized for each organization or project. So, there are many ways to approach contingency planning that largely depends on your industry, the type of project you’re working on, and many other factors.

However, a great example of contingency planning is in the IT industry. In this industry, the risk of hacking and data breaches is immense. And even with proper safety protocols and firewalls in place, skilled hackers can still mess with your data. A good way to use contingency planning to defend yourself against these threats is by backing up your data in a safe and secure place.

Another example of contingency planning is having a proper course of action in case of a power outage. These plans should include where you will get power, what operations may continue, which ones need to pause, and how to ensure that you stay on schedule despite this obstacle.

How to Craft an Effective Contingency Plan

The first step in effective contingency planning is identifying the risks. This requires an in-depth risk assessment where the team determines exactly what can get in the way of your initial strategy. This should include everything from natural disasters to raw materials that don’t pass quality standards and more.

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From there, the team can start figuring out the best way to approach different situations. It’s important to also rank the risks depending on which can have the largest impact on your business and operations.

Once you’ve ranked the risks, we recommend starting with the biggest risks. These are the ones that will have the largest effect on your organization or project as a whole, so they are also the ones that you need to prepare for the most.

FAQs about Contingency Planning

Contingency plans aren’t required by any government agency. However, they are highly recommended for any business or team. This will allow you to have a plan B for when things go wrong, which can help you come out on top even with the worst luck possible.

You need to account for all the major risks to your project or organization. This could mean natural disasters, supply chain issues, power outages, and more.

Contingency plans are large-scale efforts, which is why it’s recommended to have all major stakeholders present when creating one. That way, there are more brains working toward solving problems that could put the business at risk.

In the event of something getting in the way of the business, the senior leadership team is in charge of implementing the contingency plan. They are in charge of delegating tasks, making adjustments, and making sure everything runs smoothly.

Leon Altomonte
Article by

Leon Altomonte

SafetyCulture Content Contributor
Leon Altomonte is a content contributor for SafetyCulture. With his language degree and years of experience in content writing, he delivers well-researched, informative articles about safety, quality, and operational excellence. In addition to his professional pursuits, Leon maintains a creative outlet as a performing musician.