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We're coming off of a historic wildfire season in California, a big flood season in the Midwest, and so far a terrible hurricane season in the Atlantic coastal states (with more possible). How do businesses best plan for that natural disaster that might strike at a moment's notice?
The answer is to look at probabilities of natural disaster and be as prepared as you can get.
How Natural Disasters Can Affect Your Business
"Natural disasters aren't really all that random," said Bruce Hollcroft, CSP, ARM, CHMM, Senior Risk Control Specialist, PayneWest Insurance. "The more often something like that happens, in fact, the more predictable they can be."
"You certainly know when you're in an earthquake-prone area and the construction plan has to be more substantial than other areas," Hollcroft said. "Even wildfires are fairly predictable, in areas where there are frequent dry and windy and hot conditions. Or in the Midwest, where floods and tornadoes occur frequently — you might not get one every year, but chances are it will happen within 3 or 5 years."
"From my perspective, when you identify potential hazards, you can take steps to assess the risk," he said. "What would happen, how severe could it be, and how likely is it to happen? Then you prioritize the controls or protective measures based on that risk assessment."
How to Plan for the "After" Time
It's important to have a disaster plan in place, especially if you live and work in an area that's prone to events that could happen suddenly, like wildfires, floods, hail storms, or blizzards and heavy snow storms.
Step 1: Pull a team together internally.
This team can create multiple plans based on what potential disasters could affect the business. From long term loss of power to storm damage to office buildings or warehouses and equipment, you'll want to start to brainstorm anything and everything that could go wrong.
Step 2: Create a communication plan.
In the event of an emergency have a clear way of communicating with employees and in some cases, your local emergency personnel and the media. You'll want anything from a phone tree, a buddy system, or an automatic alert text or email plan in place so that one of a team of people can give guidance and advice to your employees. Note that basic emergency plans are often expected and required by state law or OSHA.
Step 3: Have a business continuity plan.
This might include how you get work done when there's a loss of certain infrastructure, from long-term power loss to water contamination after a flood. Have offsite resources planned, even with an offsite command center. Note which vendors and customers will need to be notified if you're doing business in a new location or with a limited staff.
If you could be faced with issues of decreased workforce or supplies, you can get some contracts in place with outside suppliers in the case of emergency. Think of it: everyone in your county just lost power due to a wildfire knocking down power lines for miles. The nearby emergency power generator company is going to be flooded with phone calls. If you have a standing order already in place, you won't have to scramble to rent power. It will already be saved for you to use.
Step 4: Be clear and communicate well.
Large disasters might mean that you'll need to keep staff and local authorities updated frequently. Know who your media spokesperson(s) will be in the event of disaster, and even talk about what those immediate messages might say. Communicate to stakeholders including board members about your status, and make sure to keep customers in the know so they don't go guessing. And especially, be clear to employees about how your business is faring and how it might affect their work hours, paycheck, and even long-term employment.
Some great resources online are from FEMA at Ready.gov/Business so you can get your business all set in case of a natural disaster.
You should be able to have this "disaster plan" discussion with your insurance broker. Policies are fairly standardized and start off at a somewhat similar place. You can discuss with your broker what natural disasters are covered and what aren't. The standard plan then gets adjusted to suit your area and your level of risk. Brokers can negotiate rates for these coverages on your behalf to get you the best price and terms and coverage.