Contingency planning is a method to help the organizations to respond to an event that may or may not have happened. Contingent plans are also referred to as backup plans for an organization, that are made keeping in mind the happening or not happening of a specific event. All business types are prone to risks, and contingency planning acts as a risk absorbent. Contingency planning is not only done for events like a major crisis but also common problems of an organization such as loss of data, loss in day to day transactions, problems concerning business relationship or even with the employees. Therefore contingency planning plays a very crucial role in a business setup. 

Risk is a major part of conducting business, therefore every organization must be prepared for all kinds of risks. For conducting contingency planning, one of the first steps is identifying the nature of risk that could occur. This is done through a thorough risk assessment. The types of risk an organization may go through depends on the type of service that the organization provides and the area they work in. For a risk assessment, it is important to identify the risks depending on the type of business and then analyze how that particular risk could affect the organization and in what manner. After the risk and the damage, it can cause is calculated, One must identify all the resources which could be used to tackle the risk and the damage. 

Some of the common areas regarding which a contingency plan could be made by an organization are: 

1. Staffing: There is no need to mention, how important people working in the organizations are. They act as the backbone of any organizations, and therefore it is important to make a plan, where an organization would deal with uncertain events related to the employees of the organization, for example, what an employee holding a very crucial position and handling a higher position in the company quits? How will the organization deal with that? 
2. Legalities: all organizations have to follow the law of land. The functions of an organization are highly dependent on what laws allow to happen. Therefore, an organization must be prepared for unwanted changes in the law or the legal system. 
3. An event like COVID: there are events which could disturb the internal as well as the external working of the companies, such as the ongoing global pandemic. The pandemic has affected a lot of business setups around the world, and therefore an organization must be ready for such an event to avoid huge losses or from becoming insolvent. 

Contingent planning can be used for almost all the risks an organization may face, be it a small one such as an employee quitting, or a huge risk which you make an organization shut down, such as COVID. Therefore, corporations must realize the importance of contingency planning and implement the same. 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.