Business Insurance

Preparing Your Business for a Natural Disaster

preparing your business for natural disasters

Depending on where you live, you may be threatened by floods, mudslides, tidal waves, earthquakes, volcanic activity, wildfires, tornadoes, hurricanes, and any number of other potential natural disasters.

Often, the challenge of running a business makes it difficult to think of almost anything else. You have so many other things to worry about, do you really have time to plan for something that might not even happen?

There’s really only one good reason to plan for a disaster. If you want your business—and you and your employees—to make it safely through and still have a business to run afterwards, you should probably take a little time to prepare.

There are several questions you should consider as you’re making natural disaster plans for your business. Here are just a few:

  • What disasters and emergencies are you likely to experience in your area?
  • What materials and supplies will you need to have on hand to ensure that you and your employees can be safe and protected during a disaster?
  • How will you and your employees communicate with family members at work, school and home? Do families have a plan that will allow them to be reunited after a disaster or emergency?
  • What preparations will need to be made to protect your business’ assets, data, inventory, and physical facilities?
  • How will you and your employees contribute to efforts at cleanup and/or recovery after a disaster occurs.
  • Do you have appropriate contingencies, including offsite data backups and business insurance, to allow you to “reboot” your business in the aftermath of a disaster?

The insurance question is a big one. As you’re considering the risks of possible disasters in your area, you’ll definitely want to consider whether your current insurance policies will help your business to recover. After Superstorm Sandy in 2012, many business owners were shocked to find that their policies covered damage from wind and hail, but not from flooding. Similarly, many business owners in the Katrina flood zone were surprised to find that their commercial auto policies didn’t cover flood damage to their company vehicles. While casualty insurance may pay for damage to property, equipment, and inventory, it won’t help account for the lost business that interruption insurance would.

The Federal Emergency Management Agency (FEMA) provides a Small Business Toolkit to help businesses become better prepared for an emergency or natural disaster. These include resources for disaster and emergency response planning, contingencies for business continuity, and a worksheet to help assess your insurance coverage. The information is both helpful and free.

As you assess your risks and make your plans, you might also consider having one or more of your employees train as a volunteer in FEMA’s Community Emergency Response Team (CERT). Having someone trained in the CERT program means you’ll have someone in house with training in fire safety, light search and rescue, team organization, and disaster medical operations. Your CERT-trained employee(s) can help advise you about your disaster plans and can also serve as a liaison with first responders and other emergency preparedness groups in your area.

With so many resources available, it’s very doable for business owners to effectively plan for natural disasters and other calamities. By starting with some basic questions and then working through the FEMA Toolkit, you will be able to come up with some ideas that will help protect you, protect your employees, and ensure that your business can get back up and running no matter what catastrophes occur.


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