The saying goes that if you prepare for the worst, you’ll usually be pleasantly surprised. The flip side is that if disaster does strike, you’ll be prepared for it, says Jonathan Theders, CPIA, president of Clark-Theders Insurance Agency Inc.
“No matter what procedures you have in place, there are some things that you can’t predict,” says Theders. “For any size business, creating a customized disaster preparedness plan will keep that business afloat if a disaster occurs.”
Smart Business spoke with Theders about how to create a disaster preparedness plan that can help you rest easy at night.
Why is it important to have a disaster plan?
Think of what could occur. Fires are the No. 1 cause of workplace emergency. Delve down into what you are going to do if that emergency happens. Not only what happens during the fire, but in the aftermath.
How do you keep your business going? You can buy business interruption insurance, but if you don’t have the right plan in place, your customers are going to go somewhere else.
Regaining trust after a disaster is the hardest part. Insurance can replace costs, equipment and some lost revenue. It can keep payroll going, but there can be years of continuing issues if a proper plan is not in place.
A few years ago, there was something wrong with the lettuce at a national fast-food chain in California, but sales at Ohio stores dropped 30 percent. They never had the affected lettuce, but they suffered the negative PR impact. How long does it take to get those customers back, and will you be able to survive?
How can a business create a disaster preparedness plan?
Start with a qualified team of people. Don’t just focus on the leadership of the organization. Get a diverse group involved, from management to the front line.
Then, start by writing down anything that could potentially happen. What are the critical pieces of equipment we need to talk about? Who do we need to contact to shut utilities off if necessary? Discuss natural disasters such as tornadoes, ice storms and earthquakes.
Then, talk about man-made disturbances, including bomb threats, arson, riots and chemical release. What happens if something happens to a major roadway? What can you do? Some things apply to some businesses, some may not.
Then there is spillover. What happens if you have a dependent property? What if the disaster doesn’t affect you but affects your supplier? How are you going to react to a dependent property being affected by a major disaster? Are your suppliers on the coast, where they could be affected by a hurricane? If so, can you get your major components elsewhere? If you can’t replace it with relative ease, you yourself could be out of business and physically never have anything happen to you.
What else should be included in a disaster preparedness plan?
After identifying all of these items, there is a hazard assessment form that uses data from prior experiences. Your team should complete that form, then grade it on the potential of that occurrence happening and its potential consequences.
You have to prioritize these items. If you have something with a very high potential of occurrence and catastrophic consequences, that would be your No. 1 priority to address. If something is rare and the consequence is minor, it can sit on the back burner if you can’t address it right now.
How can you be sure your plan will be effective?
Drills are important to understanding the training aspect of it. You can put the best plan in place, but unless you have a history of these things happening, there is always a degree of risk involved. Spend time to really understand what your risks are, implement a plan, train your people and work with a third party to support the plan.
Evacuation drills, fire, bomb, robbery plan and train for these things, then if they do occur, your employees’ minds are more likely to jump to their training rather than create panic and confusion.
Envision yourself in the emergency. You won’t have time to grab your manual and say, ‘Step one, two and three.’ You have to get yourself ready to react to at least the first couple items because nobody carries their manual around with them. Training is a key part of it so people have an understanding of what needs to be done.
Also, review your plan annually, or any time there is a major change in operations.
Consider the recent Gulf oil disaster. Typically, those rigs are one of the safer operations in the world because there is such a high degree of risk that they stay on top of their training and there are measures in place to stop these things from occurring.
In this case, the disaster recovery plan had four-year-old information. One of its listed contact people was deceased. You’ve got to stay on top of it.
How can you help employees prepare for a disaster?
You have to have an understanding that employees are the lifeblood of any organization. When disasters occur, there are certain aspects you need to make sure they understand, like where payroll is coming from.
Give them a sense of certainty about their jobs, that they are coming back and that there is a plan. Training for disasters can really help employee morale, because in a disaster, there is a lot of uncertainty. Without a plan, they are going to be more worried than they would be if they’ve been trained for it and therefore know that they will survive for another day.
Jonathan Theders, CPIA, is president of Clark-Theders Insurance Agency Inc. Reach him at (513) 779-2800 or email@example.com.