8 Ways to Prepare Your Business for a Natural Disaster
By BKS Commercial Risk Advisors
When you hear the phrase “Disaster Preparedness,” what comes to mind? Perhaps you think, “Yes, I really should make a disaster plan for my business, but I’ll do it later.” Or, “I don’t think we’re at risk of being impacted by a disaster. And if it happened, we’ll cross that bridge when we come to it.”
Can we stop you right there and tell you that without a plan to “weather” an unexpected storm (i.e., hurricane, flood, tornado, wildfire, blackout or technology disaster), the chances of your business surviving the disaster are far less?
And yes, you have insurance to cover for the loss of property. Hopefully, you also have Business Interruption coverage, but those risk management tools are not a replacement for a business disaster preparedness plan.
Here are some startling stats from an Office Depot survey regarding disasters:
- 71% of small businesses do not have a disaster plan in place.
- Nearly two-thirds (64%) stated that they do not need one.
- 63% are confident they would resume business within 72 hours if impacted by a natural disaster – even though history shows this may be optimistic.
Those who have had to walk through the unfortunate event of a significant disaster understand the importance of planning ahead. The same study mentioned above found businesspeople in areas impacted by a disaster in the past five years were significantly more prepared (74%) than those who were not (58%).
With that in mind, we’d like to share eight practical ways to prepare your business for a natural disaster.
8 Steps for your Business Disaster Preparedness Plan
1. Start the disaster plan by identifying what your operation needs to do to protect itself in the face of a natural disaster.
Even if you don’t own the building where you do business, take steps to protect your assets.
2. Determine what production machinery, computers and other essential equipment is needed to keep your business open.
Store extra supplies offsite, and make a plan for a temporary location if your company is forced to relocate after the disaster. Be ready for utility disruptions with a portable generator.
3. Find escape routes from the business and establish meeting places.
Make sure everyone understands the emergency plan before the storm hits. Designate a contact person to communicate with other employees, customers and vendors.
4. Review your insurance coverage to make sure you understand what is not covered.
Most policies don’t cover flood damage. The National Flood Insurance Program provides coverage to property owners. Go to the NFIP website at www.floodsmart.gov.
5. Consider business interruption insurance.
It covers operating expenses, like utilities, and compensates you for the income lost after a temporary closure. Your property insurance and NFIP commercial flood insurance policies don’t cover business interruption losses.
6. Make back-up copies of important documents.
Make back-up copies of all tax, accounting, payroll and production records and customer data on computer hard drives. Store the records at an offsite location at least 100 miles away. Important documents should be saved in fireproof safe deposit boxes.
7. Install protective windows, doors and shutters.
To protect your property from wind damage, install impact-resistant windows and door systems, or plywood shutters. Hire a professional to evaluate your roof to make sure it can weather a major storm.
8. Develop a post-disaster communications strategy.
Keep current phone numbers for your suppliers, employees, customers, utility companies, local media and emergency agencies. Appoint a spokesperson to get the word out that your company is still open and on the road to recovery, to dispel rumors of business failure.
As you can see, disaster preparedness does not have to be expensive, but it does have to be a priority. If it’s not then, you’ll end up doing it “someday,” and unfortunately, that day may be too late. So, don’t leave your future up to chance. One thing is certain: not having a disaster preparedness plan can mean closing your doors for good. That’s why businesses must make disaster planning a priority today, not someday.