Waypoint Insurance - Risk & Business Magazine Waypoint Risk & Business Magazine 2018 | Page 28

NATURAL DISASTERS
How To Prepare Your Business
For A Natural Disaster
A
ccording to FEMA, 40
percent of businesses never
reopen after a natural
disaster, and of those that
do, only 29 percent are still
operating after two years. Identifying the
possible risks and developing a plan that
can be put into immediate action could
possibly save your company from going
under after disaster strikes.
The most common business interruptions
are caused by technology failure,
power outages, and human error, but
catastrophic weather conditions are on
the rise. The UN’s disaster-monitoring
system has placed the United States
alongside China and India in experiencing
the greatest number of natural disasters
between 1995 and 2015.
IDENTIFY THE POTENTIAL RISKS
1. Talk with your business associates,
insurance broker, and financial
consultants about the possible risks that
could affect your business and then assess
the costs. Consider these weather and
environmental events that could affect
your geographical location and industry:
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Floods
Drought
Heat waves
Tsunamis
Hurricanes
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Cyclones
Wildfires
Earthquakes
Chemical explosions and fire
Pandemic disease and quarantine
2. Calculate actual expenses for rebuilding
your business, including temporary
or permanent relocation, liability, lost
income, payroll, and the possibility of
losing your supplier and product in the
disaster. Sit down with your insurance
agent and review your policy to see if
you have the right coverage should there
be a disaster. It might be helpful if you
photograph or record your company’s
electronic devices and equipment,
furniture layout, receipts, and other items
in your office. This will ensure you have
an accurate market value when filing
insurance and casualty loss claims.
3. Identify your company’s critical
business functions and prepare a
chart outlining the activities most
critical to your organization’s survival.
Considerations should include the
following: the potential revenue loss if
this function is not completed, how many
departments perform this function, if
there is a legal fine for noncompliance if
the function is not completed, and if the
function impacts market share and image.
4. Identify and list your critical customers
and develop a plan that will allow you to
continue to serve them after a disaster.
Establish a communication plan with your
suppliers, shippers, and other business
partners that will keep you in contact with
them. Develop additional relationships
with other companies in case your supplier
is shut down.
DEVELOP AN EMERGENCY RESPONSE
PLAN
Prepare an emergency evacuation plan and
practice it with your employees. Consider
and be ready for both the possibility of
evacuating the building and in gathering
in a “shelter-in-place” if an Emergency
Response System calls for it. Make it fun
– sign up for Shake Out BC and join in the
province-wide earthquake drill.
Your emergency action plan should
include the following:
• The system that will be used to
initiate evacuation
• Appointed evacuation team leaders,
floor wardens, and stairwell monitors
• Clearly posted emergency escape exits
and route procedures
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• Location of safety equipment
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Assistance for persons with disabilities
Designated assembly locations for
evacuation before and after
Procedures and training for
employees performing shutdown
operations