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Disaster Planning Key to Risk Management

Posted on: June 19, 2014 by Caitlin Morgan

Disaster Planning Key to Risk Management

Disaster Planning Key to Risk Management

According to the Insurance Information Institute (I.I.I.), an estimated 25% of businesses never reopen after a disaster. “Business owners are busy building their businesses, but they need to invest the time and money to develop a disaster recovery and contingency plan,” said Loretta Worters, vice president with the I.I.I., in the aftermath of Super Storm Sandy. “Having the proper insurance to help keep their business going when disaster strikes is also crucial. Every day a business is not up and running it is losing revenue.”

When a catastrophe strikes, such as a flood, hurricane, tornado or an explosion, having plans in place to recover from an incident or cope with staffing interruptions can mean the difference between restoring operations and shuttering an operation. That’s why disaster planning and business continuity should be integral components of any organization’s risk management plan.

When an organization looks at forming a disaster plan, it must take into account that each operation has a unique set of risks based on several factors including geography, processes, workforce demographics, etc. These need to be evaluated carefully and will provide planners with insight as to what is needed to create thorough protocols that enable facilities to account for employees, maintain essential functions and quickly restore operations so that when a disaster strikes, key personnel aren’t wasting time deciding how to respond.

Following is a brief overview in taking the steps needed in preparing a disaster plan:

Identifying Resources: The plan should document the types of resources that might be needed and how to obtain them. This can include finding alternative facilities, equipment and suppliers, and protecting computer systems and data by backing up computerized data files regularly and storing them off-premises. The plan should include who is responsible for obtaining or operating each resource. Having a strong incident management system in place can help manage human and physical resources during and after an incident.

Communication: Mobile technology has greatly facilitated the communication process, which is critical during drills and actual emergencies and getting the appropriate messages to different populations. Make sure there is a system in place to leverage the technology. Employees will need to know if, when and where to report to work; family members will need updates on the status of their loved ones; community members will want to know how an incident affects them; and customers will want to know what to expect if business is disrupted. Be sure the company contact list is up to date.

The media also will want information and can help communicate important messages to stakeholders and the public. In addition, depending on the type of operation, such as a nursing home or assisted living facility, regulators also might require detailed information during or after an incident. Assigning someone the responsibility of documenting communications and other details of an event can be helpful for post-incident reports that need to be filed.

Supplies: Food, water, flashlights, cots and backup power generators are among the emergency supplies that might be needed to sustain employees and customers (patients and residents if applicable) trapped on site during a flood, blizzard, earthquake or other disaster that cuts off access to or from the facility. Involving employees in the planning process can help facilities develop creative, low-cost solutions.

Training: Employees must be trained on the types of incidents that could occur and what their roles are during emergencies so that they know what actions they can take to stay safe. In fact, some types of training are required by various federal and state regulatory agencies. Incorporating disaster scenarios into these training sessions and exercises can help gauge understanding and help ensure that employees will be able to carry out their responsibilities when an incident occurs. Everyone at the organization should know how to evacuate and where to assemble after an evacuation. Employees also should be able to identify response coordinators, team leaders and others who may have leadership roles during an emergency.

Caitlin Morgan can assist you in helping your insureds develop a disaster plan as part of their overall risk management. We also can help you secure the insurance coverages needed to respond in the event of a disaster or loss. Please give us a call at 877.226.1027.

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Posted in: Risk Management