A Contingency is a potential occurrence of a negative event in the future, such as an economic recession, natural disaster, fraudulent activity, terrorist attack, or a pandemic. For example, the United States has contingency plans for every major natural disaster. FEMA, the Federal Emergency Management Agency, plans and executes these contingency plans. A plan could be to provide assistance to affected people and areas. Alternatively, a contingency could be something that should not happen at all— such as a war or financial collapse. Regardless of the potential magnitude of the negative event, planning for contingencies is essential to managing your affairs effectively during times of crisis.In general, contingencies are situations that should be prepared for. While some events may turn out to be positive occurrences in your favor— such as favorable weather during a wildfire—planning for unfavorable scenarios prevents catastrophes from happening. Many organizations have contingency plans in place for various negative events. Governments may also have contingency plans for different types of wars or military aggression. However, if you’re an individual living in today’s world, you may not need many planned contingencies since technology can mitigate most risks. You should still prepare by setting up safeguards against unexpected occurrences so you can remain safe and secure throughout life.A contingency plan is a step you should take to prevent a negative occurrence from turning into a catastrophe. Unlike emergency response procedures — which are initiated once an actual emergency occurs — , a plan anticipates potential problems before they happen by anticipating negative events and taking appropriate steps before it’s too late. For example, if someone were planning to embezzle money from your organization, he would probably do so during busy business hours when you’re least likely to notice his actions until it’s too late to stop him. He would also choose an easy opportunity over which he has full control over — such as signing off on all corporate paperwork himself so he can embezzle money unnoticed by coworkers who would stop him through normal channels. It’s essential that organizations have contingency plans in place so they can successfully run their businesses while simultaneously protecting themselves against fraudsters like this one.
