Homeowners turn to remodelers and replacement contractors to help them rebuild after disasters. But what if your business wasn’t around to help?
According to the Insurance Information Institute (III), between 25% and 40% of businesses don’t reopen after closure due to a hurricane, tornado, flood, or other devastating event. Along with III, the Insurance Institute for Business and Home Safety (IBHS) is offering tools and insight to improve a business’s chances of survival.
“Spending a few minutes to plan now will save time and money later,” says Gail Moraton, business resiliency manager for IBHS. The group recently released its downloadable Open For Business (OFB) EZ Toolkit to give business owners a streamlined way to take stock of their disaster preparedness. “OFB-EZ takes into account just how busy small-business owners are, and focuses on the most important things they must do to be better prepared.”
Take a look at these 10 guidelines as you start planning:
1. Review insurance policies. Consider flood or earthquake coverage, depending on your area. Some agencies may also offer “business interruption” insurance, but read the fine print: these policies may require the loss of business to be caused by the inciting event, not just be a result of it. Work with your agent to make sure you understand all your policies.
2. Back up your data. Whether it’s through the cloud or off-site servers, keep information secure. Store copies of sensitive documents in a safe-deposit box.
3. Assess your risks. Severe weather isn’t the only potential threat. Use the OFB-EZ’s risk worksheet to evaluate your vulnerability to everything from earthquakes to workplace violence to pandemic flu.
4. Evaluate operations. If you can’t afford to shut down, even temporarily, determine and protect any information and equipment necessary to run your business from another location.
5. Know your staff. IBHS advises keeping employee contact information updated and accessible so that you can locate them after a disaster. Be sensitive to the possible impact a disaster may have on employees’ ability to return to work.
6. Contact vendors and customers. Keep contact information for clients and suppliers up to date. Remember that your vendors might also be affected by a disaster, potentially causing loss of goods or reduction of services. III suggests contacting clients through multiple channels, including regular mail and local papers.
7. Involve the community. IBHS recommends maintaining a channel of communication with community leaders; police, fire, and emergency services; government agencies; and utility companies. Also include contact information for financial institutions and insurance agents.
8. Befriend fellow businesses. For situations that affect only your business (a fire, for example), consider a reciprocity agreement with another business. Whether you need warehouse space, Internet access, or help with repairs, chances are a neighboring business can offer some good will. Make your facilities available in turn.
9. Know your finances. A business disruption can be expensive. Establish clear strategies and procedures for controlling costs, budgeting, and tracking expenses during recovery.
10. Test your plan. Taking all of the above into account, develop a disaster preparedness plan for your business. Make sure your staff is familiar with it and schedule regular drills and reviews.