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Is Your Business Ready for a Worst-Case Scenario?

Posted on Apr 28, 2016 by: Scott West

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No matter the scale of a given disaster, your organization may find itself out of commission for days or even weeks. Losing income can have severe and sometimes catastrophic consequences.

Serious disasters can cause:

  • Direct damage to your facility
  • Power outage for a protracted period
  • Supply chain disruption
  • Damage to nearby infrastructure
  • Customers and/or employees unable reach your location
  • Inability to ship to or reach customers

Most firms fail to prepare for worst-case scenarios. Preparation goes beyond a written plan that sits on a bookshelf. The key elements are:

  • Established lines of communication with employees and a plan for emergency notifications if possible
  • Backup sites and/or work-from-home capabilities
  • A simple plan to quickly restore communications and serve clients
  • Access to power, office equipment, IT infrastructure, and enough Internet bandwidth to effectively run your organization and connect with clients

Interruptions can result from many events, including floods, hurricanes, tornadoes, and fires. For restaurants and food processors, foodborne bacteria would be a catastrophic disruption.

In addition to a business continuation plan, an independent insurance agent can offer your business solutions for partial compensation for insurable catastrophic events, such as:

  • Property coverage
  • Flood coverage
  • Business loss of income, extra expense for temporary locations and continuation
  • Foodborne pathogens for restaurants and food processors
  • Public relations expenses
  • Cyber liability coverage for data disruption, identity theft, and malicious hacking
  • Area-wide power disruptions caused by a severe storm

A business that doesn’t conduct periodic disaster response and business recovery drills, including comprehensive system tests and an annual review of insurance coverage, will find itself unprepared for an actual event. Drills don’t necessarily involve the entire staff, and shouldn’t be disruptive to the company if planned properly, but will make any disaster a lot easier to manage.