Emergency Planning for
Small Businesses
by Janet Attard
What would you do if a catastrophe struck your business? While most
business owners don't expect much (other than a lack of business) could do
them harm, there are any number of relatively "common" disasters such
as hurricanes, tornadoes, flooding rivers, fires and even earthquakes that
can potentially disrupt your small business. And while we hope there will
never be another terrorist attack, no one can discount the possibility, or
the possibility of freak accidents, power surges, or other
business-disrupting events.
Most disasters aren't preventable, and many aren't even predictable.
But you can take steps
in advance to minimize your potential for loss from catastrophic events.
Here are some guidelines.
Be sure you have adequate insurance The obvious losses you might suffer in a disaster (damage to
buildings, equipment, etc.) aren't the only possible risks you face. Rent,
loans, equipment leases and other expenses will have to be paid whether
your business is operating or not. Furthermore, you could be held
responsible for damage to any property held on your site for others (for
instance, clothing if you are a dry cleaner; computers if you repair
computers.)
If your business is home-based, don't assume your homeowners' insurance
policy will cover business casualty losses. Business equipment in you home
may not be covered at all, or if it is covered, losses may be limited to under
$2,500. If you don't already have it, ask your insurance broker about an
endorsement to your homeowners' policy to cover an office in the home, or
get a separate business owners' policy.
Check, too, to see if the amount of coverage on homes or buildings you
own is sufficient to replace the home and contents at today's prices.
Policies just a few years old may leave your building and property
drastically underinsured even if your policy adjusts yearly for inflation.
Read the entire policy
It's
unlikely that a quick glance at the front page of your policy will tell
you exactly what losses are covered, so read the entire policy. Pay particular attention to what
risks are excluded. Even if you have a business owners' policy, you may
find that employee theft, machinery breakdowns or other perils are not
covered. If you are located in a flood area, you will probably need to get
a separate flood insurance policy, too. Information about flood insurance
is available from the Federal Emergency Management Agency (http://www.fema.gov/nfip/).
Pay careful attention to whether or not your computer equipment, software
and computer data are covered, too. Those may need to be covered under a
separate policy. If there is anything that isn't clear, ask your agent or
broker to get you a clear explanation.
Business Interruption Insurance Be sure your business owner policy includes business interruption insurance
and insurance for extra expenses. (Extra expenses would be costs over and
above your normal operating costs that you need to spend to keep the
business going during restoration.)
Develop a Disaster Recovery Plan The specifics of such a plan will depend to some extent on the nature
of your business, but here are some areas you'll want to address.
Know Your Achilles' Heel
Actually you will have several of them. Determine what types of losses
would be most damaging overall to your operation. Would your business
go down the tubes if your accounts receivables files were destroyed?
What about your customer list, contact list, or all the procedures
you've developed for your independent testing laboratory? How long
would it take you to get back in business if they were destroyed? Once
you identify these critical operations, write an emergency recovery
plan that details the priority order in which your operations should
be restored and where the resources to restore each business function
can be found.
Computer Data and Vital Records Protection
Most businesses never stop to realize how much their ongoing business
depends on documents, forms, programs, employee records, customer
correspondence, contact lists, and accounting information that has
been developed or collected over the years they have been in business.
To minimize losses, make duplicates of all of your company's vital
records, computer data, video tapes, customer lists, accounting data
other documents or media that are essential to your business
operations. Store these duplicates off-site in warehouses or
other facilities specially constructed for data and record storage.
Look for a facility that is located in a different town from yours,
too.
If you just have a small amount of records or data to store, put them
in a bank safe deposit box, or if there are no other options available
to you, store them at a relative or associate's office in a distant
location. Be sure to update the backups regularly, too. All the
backups in the world won't do you any good if they are a year old, or
if they are stored in your office and your office building burns down.
Don't forget your web site. Be sure you have current backups
of that even if your host site claims to make daily backups. One large
hosting company in NY recently had a hard disk crash, and despite
claims of daily backups, were unable to restore the data from mailing
lists they operated for their customers. The reason: their backups
were too old. Any of their customers who had not captured the names
from the mailing list program and stored them on their own computer
systems were out of luck. The names were gone.
Identify alternate business facilities that could be used in a
pinch
It can takes weeks or months to restore a facility after a disaster.
While your customers may be sympathetic to your situation, if you
can't handle their needs, they will have to look elsewhere to for
someone to serve them. To avoid losing market share to your
competitors, consider what alternate facilities you might use to
operate if a disaster should hit your business. Among these alternate
facilities that will rent office or warehouse space for short terms,
friend or neighbors with a spare room or spare office, or even your
employees' homes if your business is one that would lend itself to
telecommuting.
Make an emergency contact list
Your contact list should include state, local and federal emergency
phone numbers; phone numbers, addresses and email addresses if
available for major clients, suppliers, contractors, financial
institutions, insurance agents, radio and newspapers, and any other
individuals or businesses you might need to notify if there was a
disaster. You should also have complete contact information for your
employees and corporate officers. Keep the contact list stored offsite
so it is available in case of disaster.
Be sure your employees have emergency contact information for
your business, too. This should be some offsite location they can call
to get information in the event of a disaster and to notify the
company, family and friends that they are OK.
Inventory your equipment, software, and library
Keep the make, model number, serial number and purchase price. You'll
need the information for the insurance company and for the IRS.
Keep notebook computer batteries and cellular phone batteries
charged
Notebook computers and cellular phone connections can help you stay in
touch with associates during some disasters. Often phone services (and
cellular) is restored before electricity. Keep one copy of your
contact list on your notebook computer so that you can pick it up and
carry it out of the building if you are onsite when an emergency
occurs.
Develop a set of simple procedures to follow during a disaster
Be sure each of your employees know what steps they should take if a
disaster occurs. Consider things such as crucial valves that need to be
turned off to prevent explosion, backup power supplies, location of
first-aid supplies, and methods for communicating instructions to
employees and/or customers while an emergency is in progress.
Keep the emergency plan simple, but be sure it lists the critical steps
that need to be taken and by whom. Identify escape routes and make sure
everyone knows where they are. Designate a check-in point or meeting place
that all employees should go to if there is an emergency such as a roof
cave-in that only effects your facility. Having such a check-in point
makes it easier to determine if anyone is unaccounted for.
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Copyright 1999-2008 by Attard Communications, Inc. and by the individual authors.
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