No matter how successful your small business is, all it takes is one unexpected natural disaster to halt operations and potentially shut down your company for good.
However, there are steps you can take to protect yourself. By planning ahead and having the proper business insurance, your company can survive the worst storm and remain intact.
As this article emphasizes, preparation is key. Along with an emergency response plan for yourself and your family, you should also establish one for your business. Your plan should include making sure everyone is aware of evacuation routes and meeting places. Make arrangements to relay messages within the company and be sure everyone involved is up-to-date on the plan. Always make sure emergency phone numbers are accessible during the workday.
Put together a disaster survival kit with flashlights, a portable radio, batteries, first aid supplies, food and water, cash and a digital camera for recording property damage. The FEMA website has plenty of detailed information, tips and ideas for disaster preparation, including a more comprehensive list of what should be in your kit.
Another important preventative step is having multiple copies of important records and storing copies offsite in a safe and secure location. Imagine for a moment that your entire business is wiped out, including all of your computers. What critical documents or information would be lost? It’s time to develop a storage solution to protect that information.
The article also emphasizes the importance of insurance:
Have adequate insurance coverage. Homeowners and business owners should review their policies to see what is or isn’t covered – and make sure they’ll have enough to rebuild after a disaster. Companies should consider business interruption insurance, which helps cover operating costs during the post-disaster shutdown period.
Business interruption insurance, sometimes called business income insurance, insures against loss or damage to the cash flow and profit of a business following a disaster or other damage that interrupts normal business. Imagine if a piece of machinery is damaged by a storm. While the repairs to the machine might be covered by property or casualty insurance, you will still miss out on potential income while you wait for repairs to take place. Business interruption insurance is designed to replace the income lost during that period.
The purpose of business interruption insurance is to put your company in the same financial position it would have been in if no loss had occurred. These policies typically cover profits that would have been earned and fixed costs like operating expenses that are still being incurred during the business interruption. Some policies also cover the extra expenses for moving to and operating from a temporary location, as well as reimbursement for extra expenses that arise from doing business while the property is being repaired.
According to the article, nearly 40 percent of all businesses that close because of a disaster never reopen. But with an up-to-date and realistic emergency response plan and adequate insurance, your business is far more likely to recover. If you’re doing business in New York, New Jersey or Connecticut, contact us to learn how we can help protect your company from the unexpected.
