Of all businesses that close down following a disaster, more than 30 percent never reopen again. While there’s no way to lower the risk of a natural disaster like a hurricane or tornado, there are critical measures that can be taken to protect your company’s bottom line from nature’s fury.
According to the Insurance Information Institute (I.I.I) and the Institute for Business & Home Safety, a disaster plan and adequate insurance are the keys to recovery.
A business impact analysis should be developed to identify what an operation must do to protect itself in the face of a natural disaster. Your business plan should consider the following:
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Set up an emergency response plan and train employees how to carry it out. Make sure employees know whom to notify about the disaster and what measures to take to preserve life and limit property losses.
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Compile a list of important phone numbers and addresses. The list should include local and state emergency management agencies, major clients, contractors, suppliers, realtors, financial institutions, insurance agents and insurance company claim representatives.
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Decide on a communications strategy to prevent loss of customers. Post notices outside your premises; contact clients by phone, e-mail or regular mail; place a notice in local newspapers.
- Consider the things you may need initially during the emergency. Do you need a back-up source of power? Do you have a back-up communications system?
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Communicate with your business community. Even if your business escapes a disaster, there is still a risk that the business could suffer significant losses due to the inability of suppliers to deliver goods or services or a reduction in customers. Businesses should communicate with their suppliers and markets about their disaster preparedness and recovery plans, so that everyone is prepared.
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Keep duplicate records. Back-up computerized data files regularly and store them off-premises. Keep copies of important records and documents in a safe deposit box and make sure they’re up-to-date.
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Identify critical business activities and the resources needed to support them. If you cannot afford to shut down your operations, even temporarily, determine what you require to run the business at another location.
Make sure you have sufficient coverage to pay for the indirect costs of the disaster – the disruption to your business – as well as the cost of repair or rebuilding. And be sure you understand your insurance policy deductibles and limits so you will be prepared if disaster strikes. |
