Nobody can do much about the weather or man-made disasters. but there are things a small-business leader can do to mitigate the effects of potential catastrophes.
Equally as important, a majority of business leaders said in a recent survey that felt they had inadequate insurance to cover a natural or man-made disaster.
More than half (52%) of small businesses surveyed by Travelers, the insurance company, said they do not have a written business-continuity plan or disaster-recovery documents that identify and mitigate potential threats to their business or its employees and customers in the event of a natural or man-made disaster or disruption.
Travelers recommends that small-business owners take the following steps to prepare for storm season to help prevent damage when things go wrong:
- Create a Business Continuity Plan and Establish an “Emergency File” – Review existing plans and communicate emergency evacuation and business-interruption instructions to employees.
- Develop a Hurricane Emergency Plan – Identify how the business would prepare for, respond to and recover from a hurricane. Include long-term and short-term safety requirements as well as procedures for during and after the hurricane.
- Back Up the Business – Consider keeping a backup generator and plenty of batteries on hand. Back up critical data and computer records off-site so that operations can continue. Having backup accounting documents and a record of business contents can assist in quickly moving the claim process for business-interruption coverage.
- Review Policies – Understand insurance policies and ensure the business is properly covered for potential hurricane losses such as by wind, flood and interruption.
For a detailed list of publications to help prepare and mitigate against disasters click here.
The following are among highlights of the findings of the Travelers survey, which was conducted during National Small Business Week.
- Only 48% of the small businesses have a written business-continuity plan or some other disaster- recovery document that identifies and mitigates potential threats to a business, its employees and its customers in the event of a natural or man-made disaster or disruption.
- 57% percent are only somewhat confident, or not very confident, that they have adequate insurance coverage to protect against insurable risks that can result in significant financial losses or lead to going out of business.
Approximately 57% of the small-business owners surveyed also feel only somewhat or not very confident that they have the appropriate insurance coverage to protect against insurable risks that can result in significant financial losses or cause them to go out of business.
“Given current economic conditions and increasingly unpredictable weather, small businesses have too much at stake to risk not having adequate coverage. While their larger counterparts may have the capital to self-insure and cover gaps, a smaller enterprise without the same resources may be forced into bankruptcy. This has implications not only for small-business owners, but also for their communities and our economy at large,” said Marc Schmittlein, president and CEO of Travelers Small Commercial Accounts.
“The results demonstrate the need for small-business owners to increase awareness of the risks facing their businesses. As one of the nation’s largest insurers of small businesses, along with our agents, we are committed to educating and arming entrepreneurs with tools and resources to manage risk, prevent business interruption and help them succeed.”
The Travelers questionnaire was part of a broader commitment to advocating for small businesses, he said.