Disaster Preparedness for Small Business Owners

With intense storms and hurricanes Harvey, Irma and Maria, as well as raging fires in California and the West, it is important that you prepare your business for emergencies and natural disasters. If left unprepared, you run the risk of heavy losses during uncontrollable events.

Determine What Kind of Disasters Might Affect You

What kind of natural disasters do you face where you live? Figure this out and its potential impact. Natural disaster events include hurricanes, thunderstorms, lightning, tornadoes, flooding, earthquakes, extreme temperatures, wildfires, sinkholes, avalanches, snowstorms, ice storms, tsunamis, volcanoes and drought.

Determine Your Personal and Professional Level of Preparation

What kind of emergency plan do you have for your business and your home? How prepared would your business be if you suddenly experienced a natural disaster? Would you still be able to operate? (For related reading, see: Prepare Your Finances to Handle Natural Disasters.)

Determine your risk level using the Ready Rating Program, a free service by the American Red Cross. This will help you have a starting point to know how prepared you are right now and what steps to take to build and maintain your disaster preparedness plan for your business.

Get Flood Insurance for Your Home and Your Business

If you live in a high-risk flood zone, your insurance coverage is required to have flood insurance coverage through the National Flood Insurance Program (1-800-427-4661). Getting this insurance can save you a lot of money in the future. Even one inch of water flooding your home can cost $20,000 or more, based on estimates from FEMA.

Flood insurance typically has a 30-day waiting period before going into effect. You can also get flood insurance for your small business. FEMA’s interactive visualization tool can teach you about flooding events in the past.

Determine the Critical Functions and Payments

What do you need for your business to run? Think about what you absolutely need to operate, which will need to be restored as quickly as possible in the event of a natural disaster. What functions require electricity? Think about a backup solution if you have a power outage.

What payments do you need to make even during a natural disaster? This can include your mortgage or rent payments, loans and credit cards.

Keep an Emergency Contact List and Disaster Kit

Who can you count on to help you during an emergency? Who do you need to be in touch with for your business? Keep your emergency contact information accessible and in a safe, secure location.

Your disaster kit must include at least a three- or four-day water supply, non-perishable food, first aid kit, cell phone, batteries, matches, radio and a flashlight.

Download Disaster Apps and Emergency Checklists

There are several apps available today to help during natural disasters including those from the Red Cross, FEMA, NOAA (for weather alerts) and more.

You can download emergency checklists from the government, The Red Cross has an extensive one-page checklist for hurricane preparation and a tool to prepare you for disasters with facts and tips about the area you live in. Visit redcross.org and in the “Find Your Local Red Cross” area, enter in your zip code to find out more information.

Lower Your Risk and Get Business Insurance

Think about ways you can lower the risk of a natural disaster on your business. Rent an office or building that is strong enough to survive the impacts of a hurricane or other natural disaster. If you do not have it already, be sure to get business insurance. You may want to also get additional life, property or business interruption insurance to cover other expenses.

Have an Emergency Disaster Plan for Your Team

Talk to your employees and staff and build a natural disaster plan. Run practice drills so everyone knows what to do in case of an emergency. Have email addresses for backup that can be operated from anywhere in the likelihood of power outages or server disruptions so you can keep operating your business.

Be Prepared With Three to Six Months of Supplies

Keeping three to six months worth of supplies on hand is advisable. This pertains to food and any supplies you need regularly. Think ahead and plan for situations when you might not have access to electricity.

Have an Emergency Kit for Your Essential Documents

Your emergency kit must include copies and/or originals of your important papers such as your driver’s license, Social Security card, insurance, mortgage agreement and any other essentials. Ideally include a copy of your last bank statement and last credit card bill, last year’s tax returns, estate plans, wills, deeds and health care proxies. When you work with a financial advisor and accountant, you will already have some documents saved. Keep an online copy available through a storage account like Dropbox or Google Drive that you can access from any computer anywhere. You may also want to keep a copy of vital documents on your cell phone for offline access. (For related reading, see: Protecting Your Financial Documents From Disaster.)

Take Photos of Your Home and Business

Keeping a good photo and video record of your home and business is advisable before you experience a flood, storm or natural disaster. Keep receipts of items you have purchased, along with a copy in online storage and your email so you know what you own and have an inventory that is easily accessible anytime.

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