New Survey Shows Most Small Businesses Lack Disaster Preparedness Plans
A recent survey by Nationwide reports that two in three small businesses do not have disaster preparedness plans in place, even though nearly 50% say it would take at least three months for their business to recover from a natural disaster. This is Nationwide’s second annual survey on the issue, which was conducted online by Harris Poll on behalf of the insurer. More than 500 U.S. small-business owners with fewer than 300 employees were surveyed.
The lack of preparedness comes as claims for the costs of catastrophes have risen due to construction and other expenses that have increased as the economy has improved, cites Nationwide in a press release statement.
Why aren’t business owners implementing disaster preparedness plans? Twenty-one percent (21%) go without a written disaster plan because it’s not a high priority for them or say the cost is too great. Twenty-two percent (22%) surveyed said they have already been impacted by a natural disaster. Moreover, the survey found that 71% don’t carry business interruption coverage as part of their insurance program. According to the Institute for Business and Home Safety, an estimated 25% of businesses do not reopen following a major disaster.
Although most small businesses don’t have formal plans, many have taken some steps to prepare for disaster, including having the ability to work remotely in the event of a disaster, storing duplicate records off-site and having access to alternate suppliers. But formal plans can ensure everything from employee safety to having enough insurance coverage to keep a business in operation until it is back on its feet. Disaster preparedness plans should allow for the following to be implemented:
- Gathering information about hazards and assess risks
- Conducting a business impact analysis (BIA)
- Examining ways to prevent hazards and reduce risks
- Information and documentation on resource management, emergency response, crisis communication, business continuity, IT, employee assistance, incident management, training
- Testing and evaluation of plan
- Defining and conducting different types of exercises and use exercise results to evaluate the effectiveness of the plan
- Identifying when the preparedness program needs to be reviewed
- Discovering methods to evaluate the preparedness program
- Utilizing the review to make necessary changes and plan improvements
About Caitlin Morgan
Caitlin Morgan provides assistance in risk management implementation, including in developing business continuity plans, which includes disaster preparedness and crisis and recovery programs. We specialize in insuring a broad spectrum of clients with a focus in healthcare facilities, independent living facilities, assisted living facilities, nursing homes, and home health care. It is essential that these organizations have a robust disaster plan in place. For more information about our services and insurance products, give us a call at 877.226.1027.
Posted in: Risk Management