Hurricane season ahead: Keys to disaster preparedness & recovery for businesses

Today’s businesses face a multitude of challenges, but none is more catastrophic than a natural disaster.

Related: 5 things businesses can do now to prepare for hurricanes

Since 2005, an estimated $1.4 trillion has been lost to natural disasters — and future numbers are only likely to increase as climate change affects global weather and rapid development continues with growing economies and populations, according to a new RIMS white paper by Tom K. Chan, a principal with Global Risk Consultants Corp., titled, “Weathering the Storm: Ensuring Business Resilience for Natural Disasters.”

In the absence of proper disaster planning, many companies choose to simply insure what they can and hope for the best. Independent insurance agents and risk managers can help by providing expert planning and coverage advice.

Rising to the challenge

To improve business resilience in the face of a natural disaster, there are three key aspects that need to be addressed:

1.Understand the risks and exposures.

The risks faced by a business of any size can be quantified through a holistic analysis of the vulnerability of facilities, people and surrounding infrastructure.

Disaster management and risk analysis experts are capable of identifying hazards that affect different facilities, prioritize exposures, identify high risks that threaten the company and develop recommendations for risk reduction.

Site-specific analysis is imperative for critical sites. Engaging expert structural engineers to conduct site-specific assessments can provide corporate risk managers with the accuracy and level of detail needed for key risk management and business decisions.

2. Mitigate the risks.  

Depending on the nature of the hazard and available funds, different combination of fixes can be developed. To ensure business continuity, business owners may choose to strengthen (retrofit), relocate, repurpose or replace/rebuild their facilities.

3. Set the disaster plan.

The key objective of any disaster plan is to minimize business interruption by getting operational again as fast as possible. Without a full understanding of risk, business owners may find themselves misspending their limited finances and gaining insufficient protection.

Effective disaster plans need to address preparation activities before the onset of a disaster, the course of action during the event and the post-event damage assessment and recovery operations.

The key to a plan’s success is employee training and disaster drills.

Even ordinary weather events have the ability to cause business interruption when improperly handled. Thus, a comprehensive disaster plan should account for all manner of scenarios and should be properly communicated to all members of staff to ensure readiness.

Through detailed planning, businesses can take measures to mitigate the risks associated with natural hazards. Be a resource for commercial insurance clients so they are prepared in the event of a natural disasters, whether they face a hurricane, flooding, tornado, wildfire, earthquake or hail storm.

Related: Flood season never ends, and neither should efforts to educate clients