- / Blog
- / Disaster-proof your business
Disaster-proof your business
Floods, fires and cyclones can cause huge devastation and disruption. Year on year, businesses are impacted by these events and unfortunately never recover. In fact, the United Nations Office for Disaster Risk Reduction estimates that natural hazards affect an average of 232 million people worldwide every year.
According to the US-based Insurance Information Institute, 40% of firms don’t reopen after a disaster and a further 25% fail within a year. Anecdotal evidence suggests Australian figures would be about the same, but by taking a series of simple steps to prepare, business owners can drastically increase their chances of surviving the toughest of times.
Firstly, assess your risk and critical functions, then draw up a detailed business continuity plan. But don’t just create a document and leave it to gather dust in a drawer. The plan needs to be shared with employees and responsibilities assigned. Offer training to your staff and conduct regular drills to improve your ability to respond to a disaster.
Ever heard the saying, “don’t put all your eggs in one basket?” It’s never more true than when preparing to survive disaster.
Key information should be securely stored and maintained offsite, because to get back up and running you’ll need fast access. And that doesn’t just mean backing up computer data. Keep a secure offsite list of insurance policies, banking information and contact details of employees, key customers, vendors, suppliers and insurance professionals. Make sure the back-up storage site is far enough away not to be affected by the same disaster that would strike the business. It’s also wise to create a business inventory that includes all business equipment, supplies and merchandise.
Finally, and possibly most importantly, make sure appropriate insurance is in place. The time to review your cover is before disaster strikes, not afterwards when you are frantically filing a claim. Your insurance risk adviser will take the strain out of any claims process and they can also advise you on the right type of insurance for your business. Also make sure your policy gives replacement cost coverage, so that property can be rebuilt or repaired at current construction costs.
Assess your risk, develop a strategy, test it regularly and make sure you are properly covered should the worst happen. And don’t try to do it all on your own – reach out to your risk adviser for expert advice that could make all the difference. They can help you through the process and do everything possible to make sure that after disaster strikes, your business is still going strong.