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 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.
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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.
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© 2008 Alfa Alliance Insurance Corporation