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The Bad Thing That Only Happens To Other Businesses

By June 14, 2018 August 10th, 2018 Commercial Insurance

When Brad locked up his business and went home for the day, everything was quiet. The staff had left earlier and as usual, he’d spent an extra couple of hours getting paperwork cleaned up before heading out. Business wasn’t bad considering what was going on in the economy, but it was going to be a challenging year for sure.

When he was jarred awake at about 4:30 AM by the phone ringing, he answered to hear his alarm service on the line… “we have a fire alarm activated at your business…” By the time he got there at 4:50 AM he could see flames licked through the roof and knew the next day it would not be business as usual.

A Disaster Like This Is a Nightmare for Many Businesses…

Sadly, many businesses will not open their doors again. If your business was closed for a long time, you may lose customers, employees, and profits. Most wouldn’t have enough cash on hand to survive until they open again, or would be forced to borrow to stay afloat.

Like a Boy Scout, you can “be prepared“. Here are some tips to make sure you are prepared for a fire, or any other disaster that could shut down your business…

Make sure you have business interruption insurance

Assuming you’ve insured your building and contents, what will keep you closed for good is the loss of income while you re-open.

This can often take months. Do you have enough cash to get you through this period? How will keep key personnel from leaving and getting a job elsewhere if you can’t pay them? Business Interruption Coverage can provide you with the cash you need to stay in business.

Like many surprises in life, the key is preparedness

In our conversations with clients over the last years, very few have a formal RECOVERY PLAN. The owner has some ideas in his/her head, but nothing committed to paper. Here are some of the basics of creating a plan…

Put some thought, in advance, as to how to deal with disaster and commit it to writing. You can call it what you want, Emergency Response Plan, Disaster Recovery Plan, Business Continuity Plan. Trying to figure out what to do after something like this happens is not only difficult, it’s stressful.

Your plan should include a minimum of 4 tasks:

  1. A predetermined temporary location where you can get basic functions of your business up and running quickly.
  2. Inventories/list of essential equipment and supplies that you’d need (computers, office equipment, telephone etc;)
  3.  A communication plan to keep employees, vendors, customers and the public advised as to what is to happen
  4. Make a list of your most important business functions, determine how long you can be “down” and figure out the best way to minimize it

For most smaller businesses, this does not have to be a time consuming or a long document. For larger companies, it can become more complex, but then again, there is more to lose

Brad was lucky, he had put a plan in place for his business and within a few weeks, he was back up and running. As soon as the fire was extinguished, he referred to his plan, his team knew what they had to do and were able to keep customers satisfied and cash flow in place while they got operations back to normal.

Take Care of Your Business. Be Prepared.