Having a plan in place will enable business owners to act quickly so they can recover as soon as possible.
Tampa, FL (PRWEB) October 24, 2013
Hurricane Sandy had a devastating effect on businesses in its path, with anywhere from 60,000 to 100,000 small businesses negatively impacted by the storm, according to the U.S. Chamber Foundation’s Business Civic Leadership Center. It was the third most devastating hurricane in U.S. history based on estimated insured property losses, and nearly half of the privately insured losses were from businesses, according to the Insurance Information Institute.
As the anniversary of Hurricane Sandy approaches on Oct. 29, the Insurance Institute for Business & Home Safety (IBHS) urges small business owners nationwide to learn from the lessons of Hurricane Sandy and prepare for disasters, large or small, by creating a preparedness and recovery plan.
“Continuity planning can make all the difference in a crisis, especially considering that one in four businesses forced to close because of a disaster never re-open,” said Gail Moraton, business resiliency manager, IBHS. “Having a plan in place will enable business owners to act quickly so they can recover as soon as possible.”
Business owners can prepare for a disaster using OFB-EZ™ (Open For Business-EZ), IBHS’ free, online continuity planning toolkit. This streamlined program guides users through an easy process to create a recovery plan that will help even the smallest business recover and re-open quickly after a disaster.
“As a web-based program, OFB-EZ offers business owners the convenience and confidence of developing and storing their business plan in a secure, third-party location on IBHS’ Disaster Safety website,” Moraton explained. “OFB-EZ Online uses non-technical language to help business owners create an effective business continuity plan so they are able to keep their doors open and return to normal operations as quickly as possible.”
When creating a continuity plan, IBHS recommends that businesses consider the following five questions, based on IBHS’ OFB-EZ™ business continuity toolkit:
1. Do you have contact information for employees, suppliers, and vendors in a protected place?
Ask your employees to provide their personal contact information annually. After a disaster, his will enable you to check on their well-being and share next steps for resuming normal business operations.
Also update your supplier and vendor contact information, as well as other important contacts such as your bank or insurance carriers, and keep this information in a safe location on the premises and an easily accessible off-site location.
2. Do you have plans for maintaining or resuming critical business functions?
Consider which functions are necessary to keeping your business viable and in the black, such as ones that fulfill legal or regulatory obligations, or are essential for maintaining market share or reputation. Critical business functions can change from year to year, so be sure to account for any changes such as the addition of new business systems, products, or employees.
Work with your employees so that they fully understand the procedures for recovering the critical business functions. Name an alternate employee to take charge should the primary employee be unavailable to perform the function.
3. How is your data protected in a disaster?
Determine which data and records are vital to perform the critical functions, and be sure they are backed up on one or more types of media. Store a backup copy onsite for use after small disasters, such as a failed hard drive, and store a second copy in a safe offsite location that can be easily accessed after large disasters. Additional information on protecting your data is available.
4. How will you fulfill your financial obligations?
Identify financial obligations and expenses that must be paid. You should not assume that because your area got hit by a disaster, your suppliers, vendors, and creditors are aware of the situation and are granting extensions automatically. Items such as mortgage, lease, or rental payments may still need to be made even after a disaster strikes your business.
Also have an emergency cash reserve fund or credit available. You may need cash to purchase supplies or equipment, or relocate your business temporarily.
5. Do you have sufficient insurance coverage?
Evaluate your insurance policies and meet regularly with your insurance agent/broker to be sure you understand your coverage, deductibles and limits, and how to file a claim. Most policies do not cover flood or earthquake damage, and you may need to buy separate insurance for those events. You also may need to consider a policy that will reimburse you for business disruptions, in addition to physical losses or extra expenses.
To get started or learn more, business owners can visit OFB-EZ Online to set up an account. Additional Hurricane Sandy recovery resources, as well as more business and disaster preparedness information is available at DisasterSafety.org.
About The Insurance Institute for Business & Home Safety (IBHS)
IBHS is an independent, nonprofit, scientific research and communications organization supported by the property insurance industry. The organization works to reduce the social and economic effects of natural disasters and other risks on residential and commercial property by conducting building science research and advocating improved construction, maintenance and preparedness practices.