QUESTION: With hurricane season upon us, how should one prepare for a disruption of business due to a storm or other natural disaster?
ANSWER: While Hurricane Ian is still fresh in our minds, it is wise to give thought to how to deal with such an event.
Think about all the time and resources you have invested in your small business. Imagine that it’s all gone: furniture, equipment, inventory, records, everything. What would you do?
While we are powerless to prevent some accidents and acts of God, a proactive disaster management plan can mitigate the effects on your business and help speed your return to normal operation.
Here are some tips for developing a disaster management strategy:
Identify potential hazards: In addition to natural disasters, consider man-made disasters such as fires, toxic material spills, civil unrest, vandalism and terrorism. Even if your business is not directly affected, such events could disrupt your utilities and create problems with supply chains.
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Develop an operational contingency plan: Assess the feasibility of operating out of nearby rented office or warehouse space, or even your home.
Determine what equipment and other resources will be needed to continue operation. Important documents, backup copies of computer records and other vital information should be stored in the cloud or at a secure off-site location.
Ensure the safety of employees and customers: Develop an evacuation plan that includes access to shelters, hospitals and other emergency services. Keep emergency telephone numbers clearly posted and maintain up-to-date emergency contact and essential medical information for all employees.
Perform a safety inventory: Regularly clean and test smoke detectors, changing the batteries at least once a year. Make sure you have several well-stocked first-aid kits and that all fire extinguishers are fully charged. Keep a supply of all types of batteries used in your business, and purchase a portable generator for emergency power, with fuel safely stored.
Review your business insurance coverage: Your coverage should be enough to get your business back in operation at the earliest possible date. It should cover the replacement cost of buildings, contents and essential facilities, as well as loss of income due to business interruption.
Most business owner policies do not cover floods or earthquakes. These coverages may be purchased separately.
A qualified, professional commercial insurance agent can prove to be a valuable resource in crafting a disaster management plan for your business. Remember the old adage “An ounce of prevention is worth a pound of cure.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.