Is your business prepared in case of a natural disaster? Unfortunately, many affected businesses never fully recover and end up closing soon after. So when it comes to natural disasters, preparedness—rather than recovery—should be your business’s main focus.
What is considered a natural disaster?
Catastrophic events of nature that cause property damage, injury or loss of life can be considered “natural disasters.” These can include wildfires, dust storms, floods, hurricanes, tropical storms, tornadoes, volcanic eruptions, earthquakes, tsunamis, landslides, sinkholes and winter/ice storms. Similarly, the COVID-19 pandemic was another example of a situation where companies needed to work fast to adjust and keep processes on track. So having a plan in place is always an advantage!
How to prepare your business?
When your business is prepared in case of a natural disaster, you’ll help to minimize damage and profit loss and decrease the time it takes to re-open (if you need to shut down temporarily). It all starts with a business continuity plan (also known as an emergency operations plan).
A business continuity plan is one that details what your business will do before, during and after a catastrophic event. You should communicate your plan throughout your company and practice emergency drills on a regular basis. Assign team members (within leadership and at other levels of the company) who hold key roles in carrying out the business continuity plan.
Your plan should include the following:
- Who from leadership will be in charge, and how will responsibilities be delegated to employees?
- What happens if workers aren’t able to come to work—is remote work a possibility?
- Do you have emergency supplies available and do employees know how to use them?
- How will you communicate with all employees and customers? (It’s good to have a variety of options.)
- How will you communicate with vendors and suppliers?
- Do you have alternative supply chain options for materials to ensure continued production/operations?
- What is your evacuation plan if an emergency occurs during the workday?
Set aside an emergency fund
This includes extra cash flow that will help you cover expenses despite a temporary halt on incoming revenue. An emergency fund can help your business carry on despite a temporary closure.
Consider your insurance options
It’s always a good idea to be prepared by reviewing your insurance coverage. Ensure your policy limits are appropriate to cover property losses (including labor rates and material costs). You can also purchase coverage specifically for natural disasters common to your area. Business interruption coverage is also helpful if a natural disaster requires your business to close its doors temporarily.
Let Odell Studner help!
We’re experts at risk management, and specialize in helping companies review and overcome risks—the best possible way to be prepared. To learn more about our services, contact us today!