The question isn’t if your business will face a natural disaster. It’s when.
- Over the past 50 years, the world has seen a five-fold increase in weather-related disasters, according to the United Nations.
- And the cost of those crises is seven times greater today, with North America, Central America and the Caribbean accounting for 38% of economic losses — even though the region is the site of only 18% of the disasters.
- The last few years have been particularly bad for the United States. 2020 set a new record for the number of weather and climate disasters. The second worst year? 2021.
These events can kill and injure people, inflict massive property damage and force companies to shutter their operations — sometimes temporarily, sometimes permanently. According to FEMA, if a business closes for a disaster, there is a 25% chance that it will stay closed forever.
The one silver lining? While human beings can’t prevent natural disasters, we have improved our ability to prepare for natural disasters. And that can make a huge difference: The UN says disaster-related deaths have decreased threefold over the past 50 years, largely because of early warnings and emergency management.
Don’t leave your company unprepared for the worst. Here are some basic steps that you can take to be ready for hurricanes, tornados, wildfires, winter storms and anything else that Mother Nature sends your way.
Assess Your Risk from Natural Disasters
Begin your natural disaster preparation with a risk assessment. After all, you can’t prepare for a threat until you’ve identified it.
While there are several methods available, conducting a risk assessment basically consists of asking three questions:
- What are the potential disasters facing your company? Blizzards, hurricanes, earthquakes? Your risks will look different according to your location and the type of industry you’re in.
- If a natural disaster hit, what people or assets could be affected? That could be something physical, like your fleet of delivery vehicles or your warehouses. It could also include intangibles, like your company’s reputation for reliability if you’re forced to close for a week.
- What are the potential losses and consequences? Loss of income for X number of days — or even weeks or months? Loss of life? Loss of market share? In some cases, how you respond to a disaster (or fail to respond) can lead to a lawsuit.
Ready.gov has created a risk assessment page that can help you identify potential threats, including ones that you might not have considered, like volcanos or landslides. This worksheet can be a helpful guide as you conduct your assessment.
Once you have a clearer picture of the risks facing your business, you can take action and make plans for responding to them.
For example, you may realize that many of your suppliers are located within a few miles of your facility. So, if there were an emergency, there’s a good chance they might be shut down, too. As part of your natural disaster preparation, you might identify backup suppliers from out of state and develop relationships with them in advance.
Preparation could also mean investments in your physical plant, backup power sources or an alternative site where you could operate if your main office were closed or destroyed.
Ready.gov is one of the best sources for free disaster planning tools. Their library of resources includes special kits for specific types of emergencies, including hurricanes, earthquakes, flooding and severe storms.
Develop an Emergency Response Plan
What will you do when a disaster is actually happening (or just about to happen)? That’s what your emergency response plan covers.
- To prepare for evacuations, create a map showing the quickest routes out of your facility and post it in several locations around the office. Exit doors should be clearly marked, and the exit paths left clear. Designate a location (or locations) where team members can gather after leaving the building. Someone should be responsible for bringing a list of employees and building visitors with you, so you can check that everyone exited the building safely.
- If you need to shelter from a storm: Identify the safest, most secure parts of facility so that – when a warning is issued — your team can quickly take cover. Make sure that your team has a way to monitor weather alerts, such as through a weather radio, and that someone is taking responsibility for watching for updates.
- In a major disaster, emergency providers may be overwhelmed with requests for help, so your team may have to deliver basic first aid. Identify which employees are trained in first aid and CPR, and make sure your facility has the appropriate supplies and equipment.
- Some of your employees may have disabilities that make it hard to evacuate quickly. Assigning a buddy to those workers can ensure they reach safety, too.
- If the authorities issue an emergency warning, or if you need to evacuate the building, how will you inform employees and others in your building? Will you use an alarm or a public address system? Or if you have field workers, who will take responsibility for warning them to take shelter?
Create a Communication Plan
When disaster disrupts your operations, you need to alert everyone who might be affected. So start by identifying all the audiences that might expect to hear from you. A typical list might include:
- Employees and their families
- The media
- Government officials and regulators
- People who live near your facilities
A basic communication plan should include contact information for each audience, with multiple methods of contact if possible. Those lists should be stored both in the cloud and in print form. Plan for regular updates so that your contact information is as current as possible.
Depending on your team’s bandwidth, it can also be helpful to write basic “scripts” that can be updated and used when communicating with each audience in different scenarios.
As part of your communication plan, you should also think about your communication systems.
- If your facility is no longer open, do you have a way to reroute incoming calls to another office or employees’ cellphones?
- Investing in backup communication systems that don’t rely on electricity or cellphone towers (i.e. walkie-talkies) can help your team stay connected during disasters.
Review Your Insurance Coverage
You don’t want to discover a gap in your coverage after the worst has happened. By regularly checking your coverage, you can ensure that you have the necessary financial resources to recover from disaster.
For starters, a review should make sure that your policy includes enough coverage to pay for current replacement costs, including any upgrades you have made, the Insurance Information Institute recommends.
As a result of your review, you may realize you need to buy additional coverage, such as flood insurance.
Business interruption insurance, which covers loss of income during shutdowns, is another type of coverage that could be useful. Because recovery can take longer than expected, the institute advises business owners to make sure the policy covers more than a few days.
Some businesses also pay for extra expense insurance, which reimburses recovery expenses that are above and beyond normal expenses.
Protect Your Data and Documents
To bring your business back online quickly after a disaster, it’s helpful to have ready access to essential information, especially insurance policies and contact information. Protecting your data should be a crucial part of your disaster planning.
That will look differently in practice depending on the size and nature of your business. A multistate operation that operates around the clock might have data centers in multiple states.
For smaller businesses, it may be enough to store essential records in a secure cloud.
Whatever method you choose, it’s critical to have a regular practice of updating your organization’s data, especially client and account information, either automatically or manually.
If you have documents that you simply can’t or won’t trust to the cloud, invest in a safe. Look for those tested by Underwriters Laboratories to ensure they meet standards for durability and fire resistance.
Train Your Team
Make sure your team has experience executing the emergency plans you write. That means setting aside time for training where employees can learn essential information, like what their role would be during an emergency.
For example, you might have one person overseeing the overall response, while someone else monitors emergency alerts and others ensure that all occupants either take shelter or evacuate the building, depending on the disaster.
Then supplement your training with live drills or exercises where team members can practice the plan in a relatively stress-free environment. Even if it’s something as simple as a fire drill, live practice can ingrain critical information in a way that a PowerPoint can’t.
Natural Disaster Preparation Pays Off
As you plan and prepare for potential disasters, you may be shocked by how much there is to do. The more time you spend studying the potential needs, the more needs you’ll uncover. One way to improve your planning — and get expert recommendations — is to partner with a security services firm with experience managing disaster responses.
And be sure to revisit your plans regularly to guarantee that, when needed, they’re ready to be put into action. The time you spend planning and preparing today could be the difference between bouncing quickly — or not at all.
- Natural disaster preparation starts with risk assessment so that your organization can identify the biggest needs and take appropriate action. Plans should be updated at least yearly.
- Develop plans — and practice them — for responding to disasters when they happen, including evacuations and sheltering. Employees should understand their roles in disaster response.
- Create a list of the people or organizations that you’ll need to contact after the disaster — employees and their families, customers, suppliers and others — and make sure that list is available even if your facility were destroyed.
- Have a plan for accessing the resources you need to recover. At the top of that list should be essential data, which should be duplicated and stored in the cloud or offsite.
- Review your insurance coverage regularly to ensure there are no gaps and you have the necessary resources to recover from a disaster.
At Chesley Brown, we understand that planning for the unknown can be daunting. That’s why we’ve built a framework that enables business leaders to navigate and anticipate risk before it becomes a crisis. We are here to manage risk so you don’t have to. If you or your team have questions about how to develop a business continuity strategy our experts are here for you. Contact us today!
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