Natural disasters are part of life. While some places are more likely to experience disasters than others, you’re never completely free from the threat of one occurring.
Property damaged in a storm can be repaired or rebuilt. But a natural disaster can knock a small business out of commission for days, weeks, or worse. According to the Insurance Institute for Business & Home Safety, more than one in four businesses hit by a disaster never reopen. Small businesses are even more at risk, since most only have a single location.
Protect your business by identifying the risks you face from a natural disaster, and creating a disaster action plan to help ensure your business is back up and operational as soon as possible.
Practical steps for disaster preparedness
First, inspect your property and complete any necessary maintenance to ensure it’s in the best shape possible to withstand potential disasters. For the safety of you and your staff, post evacuation routes throughout the building and educate employees on what to do in an emergency. Keep a survival kit at your business that includes a flashlight, water, batteries, duct tape and scissors.
Consider investing in a backup generator. Even if your property is not damaged you can still lose power, which can be a big threat to a business especially for retail businesses that need to reopen their doors quickly, or if goods or assets would be damaged or spoil without power. Test the system occasionally, and establish contacts for emergency diesel supplies to keep your generator fueled up.
Ensuring your business is covered
Insurance is a must for protecting any business. If you’re unsure of the details, speak with your agent or review your policy for the type of coverage you carry on your buildings and physical assets. Make sure it covers the type of damage you may encounter from a disaster, such as wind or water, and is enough coverage to return your business to operation. Consider business interruption insurance, which covers lost income due to a forced shut down following a disaster. That can be critical to the survival of your business after you reopen.
Create a business continuity plan that includes employee contact information, backup vendors or suppliers, and establishes a temporary relocation site. Communications with staff can be challenging after a disaster, but are crucial. Develop a system for how you’ll communicate, as well as procedures for work processes and payroll.
Protecting critical data
So much of a business’s vital information, including employee data, financial records, customer files and inventory, is located on computer servers and storage. All of that information can disappear quickly if not properly backed up. Electronic data should be regularly backed up, with physical copies kept at an offsite location.
Finally, designate an employee as the point person for monitoring approaching storms, and someone to relay information to staff on post-disaster procedures. Training and simulation exercises should also be conducted on a regular basis, covering emergency preparedness and contingency and response plans.
Being prepared with the right tools and procedures can play a big part in ensuring the continued operation and success of your company following a natural disaster. Learn how Nationwide can help further protect your business from natural disaster disruptions with utility and business interruption insurance.