Insurance Magazine

It is always important to have a plan that prepares your business for the possibility of a major disaster that allows it to overcome this to even continue to provide services to its clients. Here are some things that need to be considered in preparation for the possibility of such an event:

• Physical resources. Inspect the physical plant of your business noting what the impact might be of a disaster on your facilities. Be sure that the plans for your facility are in conformance with the requirements of the local building code.

• Your business community. Even in the event that your particular company is able to escape the affects of a major disaster, you should consider that there is still a risk that the business will still be suffering significant losses as the result of the inability of your company’s suppliers to deliver the goods or the services that you need or there may be a reduction in customers. It is important that businesses contact their suppliers and markets (and this is especially true if they are acting as a supplier for a business) about their plans of preparedness for a disaster and their recovery plans, so that all that are involved can be prepared.

• Make sure your building is protected. In the event that you are the owner of the structure that contains your business, make sure that you integrate disaster protection for the building or buildings involved in addition to their contents as a part of your disaster plan. If your business were to have to shut down as a real estate of a disaster, consider the financial impact toward would have on your business. Consider this during different periods such as a day, a week or a complete revenue period.

• Be sure to maintain duplicate records. Computer files need to be backed up regularly and such backups need to be stored off of the premises. If you have important documents that are in danger of being lost, they should be kept in a safe deposit box in a bank, and they should be kept up-to-date.

• List those business activities that are critical and highlight the resources required to support them. If you do not have the funds to close down your operations, even for a short time, decide what you need to maintain the business at a second location.

• Look for other facilities, equipment and necessary supplies, and also seek out qualified contractors. Consider establishing some form of reciprocity agreement with a second business. Try to gain an advance pledge from at least one other contractor who can respond when you need them.

• Make sure computer systems and data are secured. There are data storage firms that will offer your business a service used to back up your company’s computer data and they can update it on a regular basis, via a high-speed modem or also over the Internet and that stores the information in a site other than that of your business.

Carry out a regular review of your insurance plan
Check to see that you have enough coverage to pay for the indirect costs of the disaster – such as the disruption to your regular business – as well as the expense of repairing or rebuilding your business. Note that in most cases your policy will not cover flood or earthquake damage so you may need to consider buying separate insurance for these risks. It is also important that you clearly understand your policy’s deductibles and limits.