published Sunday, May 1st, 2011

Rosenberg: Have business ready for next storm disaster

COLUMN

By Joyce Rosenberg

NEW YORK—Tornadoes and flooding in the Midwest and South are painful reminders to small businesses about the need for disaster preparation — a task that often gets pushed to the bottom of a company owner’s to-do list.

Disaster prep may seem like a daunting and expensive prospect. It can include preparing your building, putting inventory on pallets and keeping a supply of plywood on hand. It means being sure data including financial ledgers, customer lists and product information are backed up. And it means thinking about how to stay in touch with employees and possibly get them working remotely.

Don’t let the potential size of the project stop you. Get started on the most important things you need to do to keep your business running.

FIGURE OUT WHAT YOU CAN AND CAN’T DO

If you have a manufacturing business or a retail store and it’s damaged in a disaster, you’ll likely be shut down until you’ve been able to clean up and repair your premises.

You can get yourself up and running faster if you think now about what you’ll need to do. That means knowing who you’ll call for repairs, and contacting them now to be sure you’re on their priority list. It means knowing which companies you’ll be ordering replacements from.

If you have a service business and your employees are able to get their work done from home, you can set up a virtual workplace. But again, everyone needs to know now how they’ll get their work done. If you have staffers who have only dial-up service in their homes, it’s time for them to get high-speed service, even if you have to pay for it.

You’ll also need to be sure that you have the technology to support working from home. That means you have a server offsite or use a Web-based service.

If your office is destroyed, and that’s where your server is, no one will be able to log in. Along that line, you want to have your data backed up offsite, too. These servers need to be hundreds of miles away, not down the street, where they can be knocked offline by the same disaster that hit your company.

You also need to be sure you have duplicate ways of getting things done. If your Internet provider is down, have a backup ready. Have multiple ways to get in touch with staffers.

These points are just scratching the surface of disaster prep. If you want to be sure you’re not missing important parts of planning, go online and look at disaster prep websites.

The federal government has several including www.ready.gov/business and www.sbaonline.sba.gov/services/disasterassistance/disaster preparedness/index.html. Your state also may have information on line.

REASSESS YOUR INSURANCE

Having enough property and casualty insurance is a critical part of disaster planning. Many owners cut back their coverage when their cash flow was tight during the recession. But if your business is doing better, don’t jeopardize your future by skimping on your policy.

Schedule meetings with your accountant and your insurance broker and get their advice on how much you need.

And if you think you don’t need to worry because there aren’t tornadoes in your area and you’re on high ground, remember that a disaster doesn’t have to come from nature. A fire can wipe you out in minutes.

To learn more about insurance, visit the Insurance Information Institute’s website, www.iii.org, and the site for the National Association of Insurance Commissioners at www.insureuonline.org/smallbusiness.

DON’T ASSUME YOU’RE COVERED FOR FLOODS AND EARTHQUAKES

Chances are, you’re not, unless you purchased a separate policy. The standard business owner’s policy will cover you for fire and wind and rain that comes in through a broken window or damaged roof. But if your ground floor is flooded by water that collected after a heavy rain, or that’s from a river or broken levee, you won’t collect on that policy. You need to buy flood insurance.

Ditto for earthquake insurance. If you’re in California, you’ll need separate coverage.

To learn more about flood insurance, visit www.floodsmart.gov. For earthquake insurance, visit www.earthquakeauthority.com.

Many owners complain that flood insurance is expensive. But so is the cost of repairing your premises and being out of operation for weeks or months after a flood.

Another caveat: If you work out of your home and your business equipment is damaged, you may not be able to collect for that loss under your homeowner’s policy.

Check with your insurance agent or carrier and see if you need to purchase either a rider to your policy or a separate business policy.

BE EVER VIGILANT

To be really prepared for a disaster, you need to be sure your plan changes when your business does. If you have new staffers, is their contact information included in the list that you’ve circulated with everyone in the company?

If you’ve bought new equipment, is your insurance coverage enough to cover the cost of replacing or repairing it along with the rest of your property?

It’s easy to forget these changes when you’re in the midst of day-to-day operations. So make regular updates of the disaster plan part of a trusted employee’s job.

If it’s something you need to do yourself, program a recurring reminder into your electronic calendar. And pay attention to the reminders.

If you’re working with a paper calendar, pick a day each month when you can double-check your plan. Write it on your calendar now.

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