Flooding, fire, cybercrime, workplace violence--these are just a few of the disasters that can threaten a business and its day-to-day operations. While few, if any, businesses are left completely unaffected by disasters and disruptions, larger companies often have the resources, tools, and manpower to navigate through a major disruption. Small businesses, on the other hand, often underestimate the risks that threaten their company, leaving them ill-equipped to manage a disaster. In fact, according to the Federal Emergency Management Agency (FEMA) between 40 and 60 percent of small businesses without a disaster recovery plan end up closing their doors permanently after disaster strikes.[i] It is impossible to protect your business against every threat it faces, but being prepared with a plan for recovery can help keep your business afloat while you get back on your feet. [link to plan article]

Not all risks are created equal

Not sure where to start? Using basic checklist can help your small business focus on which emergencies pose the biggest threat to your operations. Ask yourself:

  • Are extreme storms, tornadoes, or earthquakes common in my area?
  • Do we conduct business online? Are my servers properly protected?
  • Is our data storage secure? What about product manufacturing, financial transactions, customer information and other proprietary assets?
  • How is my business viewed by the public on social media including reviews on Yelp, TripAdvisor, etc.?

These are just a few of the threats that can affect your business. But even after reviewing threats on your checklist, choosing which risks to prioritize is a daunting task. Working with your insurance provider (or an independent agent who has expertise in your industry) can help you identify which risks you should dedicate your time and money to and which risks you can weed out as highly unlikely. You may also consider discussing with your insurance provider the option of including business interruption coverage to your policy for greater peace of mind.

Once armed with your 'risk list,' you can begin developing your disaster recovery plan.

Another essential piece to consider is your communication strategy. It is important to outline how you will update your stakeholders, including employees, customers, suppliers, and others, says Stan Brubaker, a Risk Control technical consultant with Liberty Mutual Insurance. Look for advisors or other examples that can teach you the best ways to respond to a crisis. "Learn lessons from those who have already experienced loss. If there's been a recall to a neighboring business of yours, now is a good time to discuss what they did, how to recover from it, and what they would do if they were hit with the same kind of crisis again," Brubaker says. Learning from someone else's experiences can help you be well prepared for whatever crisis comes your way.

Embarking on the road to recovery

Communicating and being transparent with your customers, employees, and suppliers can also help make sure you keep your business moving forward. By understanding your commitments to customers, you can be ready to alert them as soon as possible if delays or cancellations are necessary during a crisis. As you execute your disaster recovery plan, look for opportunities to mitigate risk such as:

  • Ensure that both your data and your software are cloud-based or have appropriate off-site backup so your team can work remotely.
  • Identify potential partners or alternative work sites that allow you to keep business operations running.
  • Audit current safety measures to ensure that your operations are as secure as possible.
  • Communicate regularly with employees to update them on safety procedures and/or practice crisis simulations.

Unlike many disasters, the road to recovery does not happen overnight. While the ultimate goal for every business owner is to return to pre-crisis status as soon as possible, feel comfortable with setting interim goals. Using your disaster recovery plan as a blueprint, tackle the crisis in phases--what needs to be done within the first hours, days, weeks, and months of a crisis. Taking recovery step by step can help you align and focus on accomplishing your overall business goals.

Resources within reach

In addition to working with your insurance partner or agent to build a comprehensive plan, small business owners can find a number of resources to help them prepare for business disasters. Some of these include:

Disaster strikes may be unavoidable, but being prepared with the right plans and tools in place can help you and your business weather the storm.


[i] PropertyCasualty360.com, "Experts Say Small Firms Lag in Disaster Planning," C. McDonald. Nov. 11, 2009. http://www.propertycasualty360.com/2009/11/11/experts-say-small-firms-lag-in-disaster-planning

Published on: Jul 18, 2017