Is Your Company Prepared for a Disaster?

Just over the last year, the United States has experienced multiple natural disasters, ranging from severe droughts in the west, flooding in the midwest, and, of course, the numerous large snowstorms along the east coast, which caused plenty of suffering for business owners due to revenue shortfalls. The question is — Is your business truly prepared for future catastrophes?

Importance of Insurance

If you ever question whether your business needs a disaster plan, ask yourself the following — Why do we have insurance? You buy policies to protect your employees and property from financial losses arising from incidents such as fire and job-related injuries. But even that allows you to reduce only part of the risk. Your coverage will presumably help you recover whatever is physically lost, but it cannot make up for the revenue shortfalls caused by a disaster. Fortunately, there is business interruption coverage which reimburses a company for lost profits in the event of a covered loss, such as a fire or flood.

Many tangible assets, such as computers, are replaceable. Yet the cash flow impacted by, and profits lost to, ruined intellectual property, nonexistent sales or undelivered products may be permanent. That’s why your disaster plan needs to account for your most valuable assets — your employees. They are the key to maintaining both your company’s goodwill and its productivity both during and after a crisis.

So, you need to design a plan that initially protects them physically, and eventually, ensures their continued compensation. After all, they must provide for their families and remain work ready.


You can begin by brainstorming as many scenarios as possible that could impact your business. What could stop your company from operating for a day, a month or a year? What happens if a key supplier shuts down temporarily or permanently, a hacker or technical problem crashes your website, or you suddenly lose power? Seek out alternative suppliers, as well as your key suppliers. That way, you won’t have to “put all your eggs in one basket.” Moreover, you should have on retainer, a strong IT consulting firm with disaster recovery capabilities.

Another vital factor both during and after a crisis is communication. You and your managers will need to concentrate on restoring operations, so you should designate and train an employee to speak on your company’s behalf.

The designated spokesperson will be tasked with keeping stakeholders informed of your recovery progress. These parties include staff members and their families, customers, suppliers, banks, and even community leaders. You should train your spokesperson to conduct a multimedia campaign, spreading the word through avenues such as your company’s voice mail, e-mail, website, newspapers and television. And, of course, you should harness the power of a public relations firm and the social media to get the word out.

Remember, as recent events have taught us, you cannot always rely on technology to stay connected during a disaster. You still should not let this deter you from anticipating crisis scenarios and reinforcing your communication networks.

Be Sure to Revisit Your Plan

Whatever you do end up deciding, you cannot expect to just create a disaster plan and then place it on a shelf. You will need to revisit the plan at least annually, reworking any shortcomings. For example, if your plan includes moving the company to a backup facility, you should set up and regularly test that location’s capacity to handle the sudden influx of people, supplies and equipment. Don’t forget to consider any new threats, especially as related to new technologies as they emerge.

You will need to keep your employees informed of your current plans. You should make certain that everyone — including new hires — knows exactly what procedures to follow by conducting regular meetings on the subject, or even conducting an occasional surprise drill. You should also be prepared to coordinate with fire, police and government officials who may be able to offer assistance during a catastrophe.

Staying Safe

As a business owner, you already assume numerous responsibilities. But that shouldn’t prohibit you from ensuring the safety of all your employees, as well as your physical plant. Hopefully, you’ll never need to exercise your disaster plan. However, in case disaster does strike, having such a plan in place will help keep you focused and allow you to be the leader that you need to be.

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