Five Ways to Protect a Business in the Post-Disaster Period

May 25, 2016

Whether it is an earthquake, tsunami, tornado, or another natural disaster, a business must ensure that it is prepared to survive both the disaster and its aftermath. Unfortunately, many companies, while taking measures to survive the physical toll of a natural disaster, fail to account for the potential financial and data loss that a disaster can produce. In today’s economy, a business that finds that it has lost its databases and is unable to secure funding to continue operations may be doomed regardless of its physical status.

For this reason, putting measures in place to secure a company’s data and provide for its continued financial health in the face of a natural disaster must be a priority for every company, regardless of its size or location. From Washington earthquakes to Florida hurricanes and from California wildfires to North-East blizzards and even man-made events, there is no place on earth where a company can afford to ignore the need to prepare for a disaster.

1. Evaluate the Most Likely Natural Disasters in Your Area

Tornadoes are very common in the Midwest but do not typically impact large areas of the region. Conversely, major California earthquakes are quite rare, but when they do occur can impact vast areas all at once, leading to the long-term interruption of utilities and other government services. When preparing for a disaster, the business must determine what types of natural disasters it is likely to face in any given area. For large companies with multiple business locations, this can result in the need to craft several specific disaster response plans for various facilities, rather than depending on a single plan.

2. Create a Disaster Response Plan

Preparing a disaster response plan is a vital part of preparing to weather a major disaster. Without one, a company will find itself unable to meet the challenges of the post-disaster period. A disaster response must include the following components:

  • A clearly defined chain of command so that even the loss of senior management will not hamper the company’s ability to make decisions in the days after the disaster.
  • Already prepared plans to shift to an emergency location so that vital company functions can continue after the disaster.
  • A complete and updated roster of the company’s employees that can be used to assist emergency services in determining the status of the company’s employees.
  • Procedures for recovering any confidential records that the company may have on-site and storing or disposing of them without risking a data breach.
  • A defined and frequently rehearsed site evacuation plan.

3. Data Protection and Post-Disaster Operations

A company must ensure that its data is always secure, no matter the type of disaster. The most effective tool, in this case, is to use off-site cloud data storage services in order to ensure that all company records are maintained in a secure location. It is important to ensure that the data storage site is geographically distant from the business. After all, it does no good to preserve a company’s data at a site that may be destroyed in the same natural disaster!

Because a cloud service is accessible via the Internet, company employees can continue working, even if they are currently housed in a hotel or other remote location. A company should maintain a detailed plan on how to quickly relocate and start making use of cloud-based data after the disaster. In addition, cloud insurance policies should always be maintained in order to ensure that the business is protected should the cloud service be interrupted for any reason.

4. Disaster-Related Insurance

Disaster insurance can cover a wide range of issues. A company should be certain that any policies it purchases will cover all potential natural disasters, unlike most general insurance policies. Common types of insurance include the following:

  • Insurance for physical damage, including the destruction of company inventory or buildings.
  • Data loss insurance, which will cover the company from any losses relating to the loss of its electronic or physical data.
  • Liability insurance can protect the company from disaster-related claims. This can be especially important should customer data be lost during the disaster.
  • Business interruption insurance can compensate the company for any lost income due to disaster-related service interruptions.

5. Watch Insurance Caps

All insurance policies have an insurance cap or limit on the total amount the policy will payout. Especially in the case of disaster-related liability lawsuits, a company may find that its insurance policy will quickly hit the insurance cap, leaving the company financially vulnerable. A company must ensure that its insurance policies will cover all likely losses, rather than running the risk that a low insurance cap will see the company destroyed by post-disaster financial losses.

Companies change over time, and the preparations that were adequate a year ago may not be sufficient today. A business should regularly reevaluate its preparations for a disaster and immediately modify any aspects of its planning that are no longer adequate to protect the business.

Preparing for a disaster is not something to be left to the day when the tornado alarms sound or the earth starts to shake. By maintaining regularly-updated procedures to prepare the business for both the disaster and its aftermath, management can ensure that the company is prepared to survive and thrive in the post-disaster period.