Insurance and Security

Disaster preparedness checklist

There's nothing you can do to lower the risk of a natural disaster like a hurricane. But there are measures you can take to protect your company's bottom line from nature's fury.

Published: February 23, 2012
Updated: December 09, 2015

For small business owners, having an emergency plan established can mean staying in business following a disaster. According to the Institute for Business and Home Safety, an estimated 25% of businesses are forced to close down following a disaster, never being able to open their doors again.

The best time to prepare for a disaster is well before it happens. There's nothing you can do to lower the risk of a natural disaster like a hurricane, but there are measures you can take to protect your company’s bottom line from nature's fury. First and foremost is putting together a disaster recovery plan.

Create a business inventory — Take photos of your company's computers, mobile devices, and other equipment. Record the items' descriptions and serial numbers, and store this information (along with their respective receipts) in a safe, off-site location.

Develop a communications strategy — You'll want to make sure you can contact key people after a disaster. Your list should include employee contact information, local and state emergency management agencies, major clients, contractors, suppliers, realtors, financial institutions, and insurance agents.

Back up data — It's a smart business practice to regularly back up your computer data files and store them off-premises. In the case of a disaster, this backup will prove invaluable. Also be sure to keep copies of important paper records and documents in a safe deposit box and make sure they're up-to-date.

Create a contingency plan — Be sure your plan outlines the following and is reviewed and updated regularly:

  • An evacuation strategy if an emergency occurs on-site

  • A process to notify all employees

  • A location for all employees to meet at, if your business's building is physically inaccessible

  • A media relations plan that addresses how employees should respond if approached by the media

  • A timeline for how employees can return to work and how customers can return to your shop or receive goods and services

  • A plan to access a backup source of power or communications systems

  • A process to determine the financial impact if your business shuts down for a day, a week, or an entire revenue period

Review your business insurance coverage

Some costs due to a natural disaster (for example, destruction of your inventory) may be covered by a standard business owner's policy. But flood damage or income interruptions due to damage that occurs off your premises, such as to a key customer or supplier's property or damage to an off-premises utility service such as your electrical supplier, may not be covered by your current policy. Consult with your business insurance agent annually to make sure there are no gaps in your coverage.

Getting back to business as quickly as possible after a disaster pays dividends beyond your company's bottom line. When companies get back on track they provide essential jobs, products, and services that can benefit the entire community. Review your current disaster recovery plan and talk with your business insurance agent today to help protect what you’ve built so you can continue serving customers for years to come.