Creating a Business Disaster Plan

When disaster strikes, the businesses that survive and recover quickly are those that plan in advance. That's why a business disaster plan is so important. Establishing a well-rounded business disaster plan before tragedy strikes will minimize any potential damage and help keep your business, well, in business. Here's how to do it.

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Step One – Preparing your Business Disaster Plan

The old adage "An ounce of prevention is worth a pound of cure" is especially true for businesses. Here's how a business disaster plan can effectively anticipate and minimize risk before tragedy strikes:

Put an evacuation plan on paper, and communicate any changes to employees.
Have a professional inspect the building’s electrical system. Faulty wiring is the cause of many nonresidential fires. Situating a business in a fire-resistant building can help protect against fire damage.
To minimize potential structural damage, make certain the building conforms to damage-resistant building codes.
Keep business records updated, including all business transactions, payroll information, and other pertinent records. Businesses should keep both computerized and written records.
Identify critical business activities and resources the business needs to maintain functionality during a crisis, and develop a specific strategy to transfer/access those resources to an alternate site.

Step Two – Create a Disaster Recovery Plan

The second step in creating a business disaster plan is to prepare for the worst possible scenario: a major disaster. A complete disaster recovery plan should:

Include a list of alternative facilities and qualified contractors to repair or rebuild the damaged facility.
Keep track of important contact information for the following: local and state emergency services, primary clients, financial institutions, realtors, contractors, insurance agents, employees and company officials.
Develop a strategy to notify customers of the new location if the business is forced to relocate for any period of time. This may include posting a notice outside the original premises or notifying clients directly.

Step Three – Purchase Business Insurance

Unfortunately, no amount of planning can guarantee the safety of any business. That's why business insurance is perhaps the most important component to any business disaster plan. Should a business be damaged or destroyed by a covered disaster, business insurance provides a safety net to keep the business alive until the business recovers. Here's what business insurance covers:

Property insurance. This covers structures and property against loss due to a covered disaster, such as fire, theft, storm damage, etc.
Liability insurance. Essentially, this coverage protects the business from loss in claims stemming from a defective product or injuries to customers or employees injured on the premisis.
Workers' compensation. This covers medical costs and a portion of lost wages incurred by an employee who is injured while on the job. It is required by law in most states for businesses with more than three to five employees.
Commercial auto insurance. Businesses which use vehicles to conduct business need this specific form of auto insurance to properly cover their vehicles.

Note that not all of these coverage options are included in every business insurance policy. Check with an insurance agent for details.

If business insurance isn't a part of your business disaster plan, shop and compare business insurance quotes today.