Planning For Natural Disasters

Planning For Natural Disasters

May 22, 2018 Business Insurance and Risk Management, The Beacon Blog 0 Comments

Every business should have a disaster recovery plan.The first consideration will probably be repairing or replacing damaged property, and continuing or restoring operations. However, there are other impacts from a natural disaster that must be addressed in a recovery plan.

  • Workplace injuries. When businesses have advance warning they can usually shut down before disaster strikes. However, some events such as earthquakes or tornados  have little or no advance warning. Some businesses may need to stay open as long as possible. This leads to greater possibility that employees will be injured either at work or while traveling. These claims will need to be reported as soon as possible, bearing in mind that adjusters will have heavier than usual workloads.
  • Disease. Flood waters can contain toxic chemicals or be breeding grounds for mosquitoes. Volcanoes, pollutant releases or dust storms contain airborne toxic chemicals. Post traumatic stress can be an issue. All of these can impair long term employee health.
  • Workforce disruption. Employees may need time off after a disaster to take care of personal needs such as loss of housing or injury to family members. Large companies may be able to transfer employees from other states to fill gaps, but small local firms must either hire temporary workers if available or scale back operations.
  • Healthcare services. Hospitals, nursing homes and other facilities may be forced to evacuate or suspend operations. Those that remain open will have additional patients. If electricity is disrupted it will affect record keeping and transfer as well as medical services.
  • Supply chain issues. Firms may not be able to receive needed supplies or ship products if transportation systems are disrupted. Supply chain disruption can also be an issue if a major supplier is impacted by a disaster. This can be addressed by including contingent business income in a firm’s insurance program.
  • Litigation. First responders including healthcare facilities can be sued for death or injury resulting lack of or inadequate response. Firms with toxic substances on premises can be sued if they are released or escape following a fire or flood.

Dealing with these issues requires advance planning including

  • Risk assessment – identify potential threats.
  • Minimize potential damage.
  • Have an evacuation plan.
  • Emergency contact information for first responders, customers, suppliers and distributors with a copy kept offsite.
  • Protection for critical data and programs with offsite backup.
  • Review of insurance policies with contact information.
  • Contingency planning including an off-site location or work from home arrangements.

As hurricane season approaches, this is a good time to make or review your disaster plan.




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