Be Prepared for Disaster

During a recent trip to Atlanta, the talk of the day was Hurricane Ivan, which was scheduled to hit the coast sometime within the next 24 hours. Being from Wisconsin, where blizzards are typically our biggest concern, it was fascinating to hear the stories of how residents were trying to prepare themselves and their homes for the storm. It was also disheartening to hear how many individuals had already lost property, received injuries or lost their lives during the rash of storms that had hit the Southeast in the previous weeks.

For business owners in the path of the hurricanes, the long-term repercussions may prove as disastrous as the storms themselves. Statistics indicate eight out of 10 companies that suffer a major disaster without having some type of crisis plan in place go into bankruptcy within 18 months.

It’s a given that businesses in disaster-prone areas should be prepared for added risks. However, disasters or emergencies can strike anywhere. It is critical for businesses to think ahead when it comes to protecting their operations.

Construction companies are certainly no exception.

The first step is to develop a crisis plan that addresses all aspects of a disaster or emergency. The plan is basically an examination of “what ifs” that could significantly impact your business. For example, what if a fire breaks out in your office during the night — would valuable records be protected? Ideally, you should develop crisis plans covering “worst-case scenarios” for both your office operations and each jobsite.

When developing a crisis plan, consider the following:

  • Because employees are your most important asset, they need to be properly trained to handle an emergency. Keep in mind that it is all too common for additional injuries or losses to occur during rescue operations. The crisis plan should cover all the steps that should be taken to avoid unnecessary risks. Go over these procedures with employees to ensure they understand what they should — and should not — do in a given emergency situation.
  • Make sure equipment and materials are adequately protected, both physically and from an insurance standpoint. Make sure you have sufficient coverage for any losses that may occur. Also determine whether replacement equipment can be quickly obtained from a local dealer or rental center to avoid added downtime.
  • Put systems in place to protect critical business data. Usable, up to date backups of key paper and electronic files should be secured at a safe, off-site location.
  • If a disaster strikes a key supplier, it could interrupt shipments of materials needed to complete a project. Check to make sure there are other sources available that can supply the necessary materials to keep jobs going.

    As part of your crisis planning, assess your insurance program to determine if coverage is sufficient for all potential losses. Consider adding business continuation insurance to assist with operating needs over the short term.

    For more information on how to prepare your business against disaster, visit the U.S. Small Business Administration web site at www.sba.gov/disaster/getready.html

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