Spring is here. The weather is warming, the sun is shining, and plant life starts to show its true beauty. However, Spring is also a sign of severe and even catastrophic weather for many areas of the country. Across the Midwest and Southeast, communities must always brace for severe weather from hail to tornadoes when Springtime rolls around. For many small businesses, one severe weather event is all it takes to threaten the survival of the organization.
FEMA has reported that 40% of businesses do not reopen following a disaster. This stunning statistic shows why proper planning and preparation are needed to increase the resilience of small businesses throughout the country, not just those in high-prone areas. When it comes to natural disasters, the question is not if it will occur, but when.
This article will outline three ways small businesses can increase their resilience to natural disasters to prepare for the Spring weather season. These tips are focused on helping small businesses ensure they keep their doors open after a disaster strikes.
Have a Plan
Pretty simple, right? Well, this is much easier said than done. Having an emergency and business continuity plan is crucial to getting businesses back on their feet quickly after an adverse weather event strikes. Let’s outline a few parts of a disaster plan that must be included, at a minimum, to keep your employees and business safe:
- A contact list, so employees know who to reach out to internally and externally once a disaster impacts the business
- An evacuation outline, letting employees know what to do and where to go when a disaster strikes (maps are always a nice touch)
- A designated employee who will be responsible for shutting down the business and being the lead for disaster mitigation activities (e.g. debris clean-up)
- Employee emergency contacts, including those for any specific health issues which could require medical attention after a disaster
- Disaster vendor list to help get the business back up and running as soon as possible (e.g. water remediation companies, utility providers, insurance contacts)
In today’s data-driven world, much of the public’s focus is on hackers, ransomware, and cyber breaches. However, many businesses lose focus on another grave threat to data loss: natural disasters. Floods, fires, and even heavy rain can be enough to wipe out enormous amounts of data, setting businesses back to a point they may not recover from. Businesses must be prepared to reduce downtime after a natural disaster, so here are a few quick tips to help with backing up data for safekeeping:
- Backup your data to a cloud platform, so no matter what happens to your business, you can access all your data anywhere, at any time.
- Create a disaster recovery plan. This will give your business a clear outline on how to recover data quickly after an adverse event.
- Keeping a data inventory is essential, as it is hard to know what critical data to back up if a business has not completed an inventory of what data they currently possess, and what data is critical for operations to continue post-disaster.
- Protect your physical structure from data loss through mitigation strategies, like backup generators, power surge protection systems, or flood/moisture sensors.
Weather-Proof Your Insurance Coverage
After a natural disaster or severe storm, small businesses turn to their insurance companies for financial assistance. Small businesses need to make sure they have the correct coverages in place to make their disaster recovery process as smooth as possible when turned over to insurance. Let’s look at a few insurance coverages and ways to make sure your business is well-protected.
Commercial Property coverage is a no-brainer when it comes to protecting the physical locations of your business. Your policy limits should be adequate for both the building and the personal property contained within. Ensuring you have the proper coverage and limits in place will go a long way in helping you recover financially from a severe natural event.
Business Income/Extra Expense
This can often be one of the most important coverages for small businesses for when a disaster strikes. Business income/extra expense coverage helps indemnify small businesses for intricate expenses related to post-disaster activities, such as costs for removing debris, temporarily relocating your office space, and leasing generators to keep the lights on.
If your business relies on a fleet of automobiles to complete job duties, having the right insurance in place is crucial. For any businesses located in high-prone areas, comprehensive coverage should be included in the policy to cover damages caused by natural disasters. Comprehensive insurance specific to natural disasters would cover damages to your automobiles resulting from floodwater, hail, and wind.
Storm season can bring a multitude of unwanted and unforeseen surprises to small businesses across our country. The surest way to battle weather uncertainty is to be prepared with a plan, ensure your data is backed up, and have the proper insurance coverages in place. With just a few quick actions, you can have your business ready to take natural adversaries ranging from tornadoes to flash floods. Stay safe out there this Spring!
Cory Mangum, MBA, CPCU
Cory Mangum is not affiliated with Cetera Advisor Networks LLC.