If your office were affected by flood, fire, earthquake, or another natural disaster, could you bounce back? Your recovery from a disaster begins with having adequate insurance coverage. However, your insurance coverage should be supported by a disaster recovery plan. Consider one entrepreneur's experience.

The Northridge, Calif., earthquake of January 1994 wiped out Sue's Secretarial Service. The facility housing Sue Clamage's business was so severely damaged that she was never allowed back inside. She lost important computer files, customer records, and completed assignments. Her equipment losses included five computers, three printers, a Xerox machine, and a phone dictation system, totaling about $65,000. Although her standard insurance policy helped recoup some of the losses, the experience prompted Clamage to beef upher disaster preparedness strategy.

Your business can recover quickly from a disaster if you plan in advance. Safeguards to consider:

  • Keep duplicate records off the premises.
  • Back up your computer system regularly.
  • Keep duplicate copies of important records, documents, and other important numbers in a safe-deposit box.

You should also develop a communications strategy to prevent loss of clients or customers. For example, check with your local phone carrier to find out about available service routing options to keep your business going. Consider alternative facilities that you could use in the interim, such as sharing a space with another business owner. Verify whether your equipment suppliers can provide you with loaners. Also, consider having an additional credit line so that you can buy what you need while you're waiting for your insurance claim to be processed.

Write up your plan and make sure your employees know whom to contact and what to do if you're affected by a disaster. Along with renewing or revising your insurance policy, you should dust off your disaster plan annually - tweaking it to accommodate any growth or changes within your operation. For more information on how to plan and adequately insure your business for disaster, visit the Insurance Information Institute's Web site at www.iii.org.

Copyright © 1999 Kimberly Stansell. All Rights Reserved.