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Disaster Preparedness for Business

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Know Your Risk

​There are many steps businesses can take to prepare for the impact of the many hazards they face in today’s world including natural hazards like floods, hurricanes, tornadoes, earthquakes and widespread serious illness such as the H1N1 flu virus pandemic. Human-caused hazards include accidents, acts of violence by people and acts of terrorism. Examples of technology-related hazards are the failure or malfunction of systems, equipment or software.

If you are not sure whether your property or business is at risk from a disaster caused natural hazards, be sure to check the MyHazards website.

​Take the Necessary Precautions

Every business should have a plan. Business continuity planning must account for both man-made and natural disasters. You should plan in advance to manage any emergency. Be prepared to assess the situation, use common sense and available resources to take care of yourself, your co-workers and your business’s recovery.

Consider evacuation planning, shelter in place measures, emergency supplies – both life sustaining and lifesaving, and communications. Install fire extinguishers, smoke alarms and detectors in appropriate places. Consider the ways in which people, products, supplies and other things get into and leave your building or facility.

Have a Business Continuity Plan

Always back up your data. Essential data should be backed up regularly and stored off-site in case of disaster. Another good tip is to have physical copies of contact information for employees, suppliers, and customers.

Designate a secondary location if your primary location is damaged. This will help you get back to business during the recovery phase.

Prepare for Utility Disruptions during and after a disaster. Businesses are often dependent on electricity, gas, telecommunications, sewer and other utilities. Carefully examine which utilities are vital to your business’s day-to-day operation. Speak with service providers about potential alternatives and identify back-up options such as portable generators to power the vital aspects of your business in an emergency.

Protect Your Employees

Your employees and co-workers are your business’s most important and valuable asset. Two-way communication is central before, during and after a disaster. Include emergency preparedness information in newsletters, on company intranet, periodic employee emails and other internal communications tools. Consider setting up a telephone calling tree, a password-protected page on the company website, an email alert or a call-in voice recording to communicate with employees in an emergency. Designate an out of town phone number where employees can leave an “I’m Okay” message in a catastrophic disaster.

If you have employees with disabilities ask them what assistance, if any, they require. People with disabilities typically know what they will need in an emergency.

Promote Family and Individual Preparedness: If individuals and families are prepared, your company and your co-workers are better positioned in an emergency situation. Encourage your employees and their families to: Get a Kit, Make a Plan, Be Informed. Go to Ready.Gov for more information.

​Communicate Plans with Customers and Suppliers

Detail how your organization plans to communicate with employees, local authorities, customers and others during and after a disaster. Be prepared to provide employees with information on when, if and how to report to work following an emergency. Provide top company executives with all relevant information. It may also be important to update the general public. Inform your customers about whether and when products will be received and services rendered.

Review Your Insurance Coverage

Inadequate insurance coverage can lead to major financial loss if your business is damaged, destroyed or simply interrupted for a period of time. Review your current insurance coverage. Have your business appraised at least every five years. Inventory, document and photograph equipment, supplies and workplace. Have copies of insurance policies and customer service/home numbers. Obtain Business Interruption Insurance. Consider “Accounts Receivable” and “Valuable Papers” coverage and “Income Destruction” insurance. If you have Business Owners Protection Package, check the co-insurance provisions. Remember: Some disasters require separate coverage. Check your policy.

20 Questions to Ask Your Insurance Agent before a Disaster

  1. If I don’t already have one, am I eligible for a BOP policy?
  2. What deductible do I have and how does it apply?
  3. Do I have a copayment and/or coinsurance?
  4. If I have coinsurance, how does it work?
  5. Is my property coverage on an actual cash value basis or a replacement cost basis?
  6. Is my personal property and building coverage on the same basis (replacement cost vs. actual cash value)?
  7. Do I have/need a peak season endorsement on my inventory?
  8. If my policy is a “named perils” policy, what perils are covered? Are there any possible causes of loss that could impact my business that are not covered? Would an open perils policy cover those types of losses?
  9. What types of losses are excluded under this policy? Which ones might be particularly relevant to my business?
  10. What are my policy limits and how do the limits apply? Do I have/need an inflation guard?
  11. If I increase my deductible, how much does my premium go down?
  12. If I increase my limits, how much does my premium go up?
  13. Would a blanket policy (for multiple locations) be helpful to me?
  14. Are there any premium discounts that I could be eligible for? Is there anything I can do to get (additional) premium discounts?
  15. How many carriers do you work with that underwrite my type of policy? What did you choose to place my business with the company you selected? Ask this question if you are working with an independent agent.
  16. Have you “shopped” my insurance recently?
  17. Is my insurance through the surplus lines? What does that mean for me?
  18. What is my company rated by AM Best and/or Standard and Poor? How does that compare to other insurers?
  19. Do you conduct free, regular risk assessments? How often? (If not, you might consider working with an agent who does.) Is there any exposure that you are aware of for which I do not have insurance?
  20. Should I consider getting a claims-made basis liability policy instead of occurrence?

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