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3 Tips to Making Your Business Disaster Ready

September 7, 2012

As we transition from the warm, dry weather of wildfire season to the wet, unpredictable conditions that come with the hurricane and flooding seasons, now is a good time to review your business’s disaster preparedness plan or to put a plan together if you haven’t already. Lately, it seems the news has been full of disasters – wildfires in Colorado, earthquakes in South America and Hurricane Isaac in the Gulf. The thought of such things happening close to your home or place of business is naturally scary, but you shouldn’t feel helpless. There is a lot you can do ahead of time to make sure you’re prepared and empowered should disaster strike.

Here are three tips to help get you started thinking about disaster preparedness for your business:

1. Consider the Environmental Risks Facing Your Business

This may seem obvious, but a lot of businesses never undergo a full environmental risk assessment when setting up shop. Ask yourself: What types of foreseeable disasters might affect your business based on its location? Is your office in a flood plain or a part of the country regularly affected by hurricanes or other seasonal weather? What about a wooded region susceptible to wildfire? Nobody likes to think about these things, but knowing the risks facing your business is the first step in preparing against them.

FEMA offers a great tool to help you assess the environmental risks facing your state. It’s easy: go to this map and click on your state or territory. From there, you can explore information on your region’s most common natural hazards. The site offers guides on what steps to take before, during and after each type of disaster to prevent loss. Take the time to read through this information and formulate a specific emergency plan that makes sense for your business and family.

2. Make Sure Your Business Property is Insured to Value

Property values are changing all the time. As a business owner, it’s important to regularly review your schedule of insured property with your insurance agent to make sure any buildings and property owned by your business are insured to their accurate value. If there is a discrepancy between the insured and actual value of a business’s property at the time of a loss, a great deal of confusion may result when the business owner files a claim. This confusion can lead to a delayed delivery of the coverage amount, a lower than expected coverage amount or, in some cases, a monetary penalty at the time of loss. None of these are difficulties a business owner wants to deal with after suffering a disaster.

3. Consider Purchasing Business Interruption Coverage

In your line of business, would losing several days (or weeks) of operations and income due to a disaster be an insurmountable problem? If so, you might want to consider purchasing Business Interruption Coverage. This is an extension that can be added to a property policy in order to cover the loss of income a business faces when a disaster forces it to temporarily close. A Business Interruption policy can cover lost profits, fixed costs incurred by any closed property and temporary relocation costs so you can keep your business up and running while your property is being repaired.

Every business is different. Each has different values and different needs. As such, there is no one-size-fits-all disaster preparedness plan and the suggestions offered above are by no means exhaustive. We do hope, though, that they’re enough to get you started. If you want to learn more about how to protect your business from unwanted loss, subscribe to the Avanti Reader via RSS or follow Avanti Business and Insurance Services on Facebook or Twitter (@AvantiInsurance) to get automatic notifications of future posts. As always, thanks for reading!

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