Your business continuity plan: 10 ways to minimize risk before the next natural catastrophe

10 points to include in your business continuity plan, to mitigate risk before a natural disaster

 

Fires in California and Colorado. Floods in Iowa. Earthquakes in Oklahoma. And that’s just this month. No matter where you’re located, there’s always the potential for a natural disaster. That’s why it’s crucial to prepare ahead nature’s next curve ball, with a business continuity plan. It’s your strategy for being prepared.

Last year, more than 10 million acres burned in wildfires, compared with 5.4 million in 2016, according to Insurance Information Institute. Also in 2017 were two of the top 10-ranked significant flood events over the past 12 years (Hurricanes Harvey and Irma). So far this year, there have been 456 tornadoes in the U.S. alone. All add up to one truth: It pays to be prepared for a natural disaster with a business continuity plan, so that your tribal business is better positioned for recovery.

We’re offering solutions that will be applicable to all types of Mother Nature’s temper tantrums. Some will be applicable to your locations; others will not (floods vs. fires, for instance). Still, here are 10 ways you can plan ahead to minimize your risks.

1. Start your business continuity plan by identifying your hazards

As in any risk assessment plan, you’ll first want to identify your hazards. What is stored in an open yard that will be damaged? What is your risk of fire, whether from natural or man-made sources? How about your risk of flood? If you’re in an earthquake-prone area, what steps can you take to secure your building and its contents? If the disaster occurs during work hours with little-to-no-warning, how will you provide for your staff?

2. Check your insurance coverage

Now’s the time to confer with your agent to ensure you’re covered for natural calamities occurring most often in your area. According to Florida’s Office of Insurance Regulation (as reported in PropertyCasualty360), Hurricane Irma impacted 90,000 businesses and 58,000 commercial properties. Many received the insurance coverage they expected; others found out the hard way that they didn’t have the coverage they assumed they had. It pays to check with your agent to confirm your coverage and eliminate any gaps.

If you’ve made improvements to your property, added new equipment or increased your inventory, be sure to also discuss this with your agent. Yes, it may slightly increase your premiums, but otherwise, these enhancements may not be covered because you didn’t increase your policy limits.

Consider additional flood or earthquake insurance. Typical property insurance policies exclude these, so check with your agent if you’re in a flood or earthquake-prone area.

Also consider adding business interruption insurance, which helps cover your payroll and the lost profits you would’ve earned, based on your records, had the disaster not occurred. It also helps pay ongoing operating expenses that continue, even though you’re temporarily not in business.

3. Have a communication plan in place

We’ve discussed this in length in an earlier blogpost, How to prepare a tribal disaster recovery plan for your business. View this article for tips on compiling your list of important phone numbers; how you’ll contact employees, customers, suppliers and more. You’ll also want to file a copy of your disaster business continuity plan with tribal law enforcement officials so that they can aid you if and when that time comes. And once you’re back in business, you’ll want to quickly – and continually – communicate via social media and other channels appropriate for your tribal business.

4. Train employees

Have a written plan for evacuation, and one for sheltering-in-place. Train employees on all procedures. For more details, see Create emergency plans for your family and tribal entity.

5. Protect your computer data

Your receivables and payables. Your key business contacts. Your customer records. Duplicate your important records and papers, storing them in a secure (offsite) location. Use a data storage firm that offers offsite and online backups of computer data. Update your back-ups regularly.

6. Decide how you can strengthen your supply chain

Disruptions may occur your supply chain, so it’s crucial to include these risks in your business continuity plan. You may be cut off from vendors who supply critical inventory and supplies. You may be unable to distribute or sell your goods, due to the simple fact that your customers can’t get to you. All create a crucial issue, quickly draining your financial reserves and weakening your customer relationships. What’s your Plan B, in case of an emergency?

7. Identify critical business activities

If you cannot afford to shut down your operations temporarily, determine what you will need to run the business elsewhere. What resources need to be on hand for you to continue? What alternative facilities, supplies or equipment can you use? Consider a reciprocity agreement with another business: If you’re temporarily out of commission, you can conduct business from their location. If they’re badly damaged, you agree to allow them to use your facilities.

8. Identify the contractors and salvage specialists you’ll want to work with

Now – before a disaster – is a good time to vet any contractors you’ll need in the event of major damage. Check with your tribal leaders and your agent to see who they recommend. Meet these business owners ahead of time to have your business continuity plan in place.

 

After the event:

9. Photograph & document damages and temporary repairs

Although your first impulse is to protect your property from any further damage from the elements, the first thing you need to do is quickly snap some photos or video with your smartphone, showing as much detail of the damage as you can. Also, make sure you understand now – ahead of time – what temporary repairs are covered so that you’re not unwittingly impeding your claim. Then keep records (and take photos) of temporary repairs you make prior to meeting with the adjuster.

10. Protect your workers

Typically, cleanup and recovery operations fall to you as the business owner and to your employees. Take care to minimize hazards to your team as they help you get back to business. Before anyone gets started, communicate any dangers and hazards to watch for. This may include downed power lines, wildlife taking refuge in the structure, standing water which may mask other issues, structural damage or chemical spills.

Make sure they’re dressed appropriately for the hazards: hard hats, safety glasses, heavy work gloves and sturdy boots or shoes. Provide water and ensure the group takes frequent breaks. If chemical spills or animal or human waste is present, provide disinfecting solutions to be used prior to eating/drinking and at the end of the shift. Workers should also be trained in the proper use, cleaning, decontamination and maintenance of personal protective equipment. Have first aid kits on hand to quickly attend to any injuries.

If you’re using a generator, be sure it’s adequately vented. If you’re using power tools, their electrical supply should be equipped with GFI protection. Guards and safety devices should be in place for all equipment, such as chainsaws. Avoid using extension cords in wet areas.

Hopefully you’ll never need to use your business continuity plan.  At the least, it’s just a good business practice. At best, it just may help you salvage your business after a natural disaster.

 

Resources

https://www.zurichna.com/en/knowledge/articles/2017/12/post-disaster-recovery-keeping-your-workers-safe
https://www.propertycasualty360.com/2018/07/02/learning-from-hurricane-irma-properly-insuring-and/
https://www.iii.org/research-data/catastrophes
https://www.zurichna.com/en/knowledge/topics/severe-weather
https://www.thesilverlining.com/safety-resources/tips-to-help-avoid-losses/commercial-business-tips/can-your-business-survive-a-natural-disaster-
http://www.inguard.com/blog/3-tips-on-how-to-protect-your-business-against-natural-disasters
https://www.thesimpledollar.com/protecting-your-business-from-natural-disasters/
https://www.fema.gov/media-library/assets/documents/13232