Protecting Your Business from Disaster and Emergency

You don't usually hear about the local businesses that go under because of hurricanes and earthquakes, but it's not uncommon for small companies to fail after such catastrophes.

Businesses

located in disaster-prone areas are at a higher risk for certain natural disasters. Such companies should carry more coverage and carry specialized insurance to address those risks, but all businesses are vulnerable to accidents and emergencies. The best way to deal with uncertainty is to carry enough insurance and to be prepared.

In addition to carrying business interruption insurance, an extremely important component of an effective risk management plan is being prepared to respond quickly to an emergency or a disaster. Being prepared doesn't mean having a few gallons of water tucked away in the back of the office, nor does response mean returning to your office to inspect the damage after a disaster. It means having a plan in place that ensures you can continue to conduct business immediately after a disaster or emergency strikes. Take steps to develop plans for recovery in the event of a business disruption or a complete interruption.

First, carefully assess your critical business functions. Consider which parts of your business can sustain a prolonged interruption. If you can afford to put all functions on hold and potentially lose customers, you may be able to survive a mild emergency. But many businesses can't — a mild or severe disruption in normal business may have disastrous effects on the future of the company.

The following questions are a starting point for developing a comprehensive recovery plan.

• What provisions have been made for protecting the physical safety of your employees?
  
  
• Do you have a crisis management team?
  
  
• Where will you set up a command center if your offices are not available?
  
  
• Who will perform damage assessment, and who is qualified to declare a state of disaster for the company?
  
  
• What provisions have been made for resuming computer operations?
  
  
• Have you identified and prioritized critical applications?
  
  
• Does each job function in your company have a primary and secondary person assigned to perform its critical duties?
  
  
• Are copies of vital records and legal documents stored safely offsite?
  
  
• Where are the most recent employee telephone lists stored? How about key vendors and critical customers? How quickly can you contact these people?
  
  
• Have you defined an alternative recovery site? How large a facility will you need?