When it comes to planning for natural disasters, the word “planning” is key. If you wait until an event occurs, it’s too late by that time to effectively manage and recover from any losses your business may incur. Without a plan to manage an unexpected disaster, such as a hurricane, flood, or wildfire, the chances of your business recovering at all or quickly from the disaster are far less.
While you should have property insurance and business interruption coverage, those risk management tools are not a replacement for a comprehensive disaster preparedness plan.
Let’s look at eight practical ways to prepare your business for the effects of a natural disaster:
- Identify what your operation needs to do to protect itself in the face of a natural disaster.
Even if you don’t own the building where your business operates, take steps to protect your assets. - Determine what production machinery, computers, and other essential equipment are needed to keep your business open.
Store extra supplies offsite and make a plan for a temporary location if your company is forced to relocate after the disaster. Be ready for utility disruptions with a portable generator. - Find escape routes from the business and establish meeting places.
Make sure everyone understands the emergency plan before the storm hits. Designate a contact person to communicate with other employees, customers, and vendors. - Review your insurance coverage to make sure you understand what is and is not covered.
Most policies don’t cover flood damage but check with your trusted advisor to carefully review your policies. The National Flood Insurance Program provides coverage to property owners. Visit the NFIP website at www.floodsmart.gov. - Consider business interruption insurance.
It covers operating expenses, like utilities, and compensates you for the income lost after a temporary closure. Your property insurance and NFIP commercial flood insurance policies will not cover business interruption losses. - Make backup copies of important documents, such as
tax, accounting, payroll, production records, and customer data. Store the records at an offsite location at least 100 miles away. Important documents should be saved in fireproof safe deposit boxes. - Install protective windows, doors, and shutters.
To protect your property from wind damage, install impact-resistant windows and door systems, or plywood shutters. Hire a professional to evaluate your roof to make sure it can weather a major storm. - Develop a post-disaster communications strategy.
Keep current phone numbers for your suppliers, employees, customers, utility companies, local media, and emergency agencies in a secure location. Appoint a spokesperson to get the word out that your company is still open and on the road to recovery.
Disaster preparedness should be a priority, but it does not have to be complicated. The Baldwin Group’s advisors can help you take the complexity out of the process and make disaster planning a priority today, not when it may be too late.
This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The content of this document is made available on an “as is” basis, without warranty of any kind. The Baldwin Insurance Group Holdings, LLC (“The Baldwin Group”), its affiliates, and subsidiaries do not guarantee that this information is, or can be relied on for, compliance with any law or regulation, assurance against preventable losses, or freedom from legal liability. This publication is not intended to be legal, underwriting, or any other type of professional advice. The Baldwin Group does not guarantee any particular outcome and makes no commitment to update any information herein or remove any items that are no longer accurate or complete. Furthermore, The Baldwin Group does not assume any liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Persons requiring advice should always consult an independent adviser.
