Are You Prepared for a Business Disaster? A Four-Step Plan for Success

When an unexpected disaster interrupts your small business, getting back on your feet can be a challenge. In fact, 25 percent of businesses that close their doors due to disaster never reopen, and one-third of small business owners report having experienced a weather impact on their business or a business they are connected to.

While these odds may not seem bad at first glance — especially if your business is located in a fairly stable climate — Mother Nature gets more unpredictable with  . Plus, natural disasters aren’t the only disasters you need to worry about. Today, 70 percent of cyber attacks are aimed at businesses with fewer than 100 employees.

When disaster strikes, businesses have little time to react and even less time to develop plans. By having adequate insurance coverage and a clearly established continuity plan, your business can position itself for recovery. And while you’ll also need to discuss your disaster insurance coverage with your independent insurance agent, you can get started on your business continuity plan right away.

“While you can’t predict every disaster that may result in an outage, understanding the potential financial and operational impact can help you be more prepared for whatever comes your way.”

How to Develop a Business Continuity Plan

Here are four steps to developing a business continuity plan that apply to any business — regardless of industry or business model:

Build Your Business Continuity Team

In order for your plan to be effective, you’ll need input from stakeholders across your organization. First, identify a point person to oversee your plan. Then, bring in team members who represent all of the different aspects of the business:

  • A representative to assess financial points
  • A technology expert, to develop backup storage and access plans
  • A marketing representative, to determine how to get the word out
  • Your insurer (when possible) to offer resources for mitigating disaster

Regardless of the size of your business, you can leverage the various types of expertise available among your employees to create a solid plan from all angles.

Identify Perils and Capabilities

The next step is to identify potential perils — such as hurricane damage or data breaches — and the threats they present to your staff and business activities. While you can’t predict every disaster that may result in an outage, understanding the potential financial and operational impact can help you be more prepared for whatever comes your way. Have everyone on your team compile a list of likely negative outcomes in the event of an outage, and then prioritize them. Think in terms of categories, such as life-threatening, business-crippling, inconvenient, or temporarily avoidable. In addition to understanding internal effects, it’s also important to consider how perils could affect critical vendors and customers.

Develop a Plan

Your plan should clearly spell out — in writing — how your business will operate after a disaster strikes. Address the specific processes and activities your team will need to enact to handle the aftermath. It should have defined responsibilities, clearly outlined means of communication, methods for maintaining security and critical functions, and proposed time frames for accomplishing each step. Everyone in the company should know the plan and know what to do in the event of an outage. Finally, it’s important to make your plan readily accessible, even if you aren’t able to enter your building.

Test and Implement the Plan

Having a plan won’t make a difference if you aren’t prepared to enact it. Make sure your team is trained, prepared and tested. Ensuring everyone is knowledgeable and on the same page about evacuation plans, alarm systems, shutdown procedures, offsite server access, and cross-training for key positions is an important step. As you roll out and test your plan, learn everything you can from your drills and hypotheticals to determine weaknesses and revise as necessary.

Staying Ready

Inevitably, your business will grow, employees will come and go, and roles and processes will change. Make sure you periodically revisit both your insurance policies and your business continuity plan to adjust for these changes — especially following an interruption or a near-miss, as these events can expose gaps in preparation.

For more tips on creating your own business continuity plan after an unexpected interruption, check out our sample disaster preparedness and continuity plan for hurricanes and tropical storms.

This website is general in nature, and is provided as a courtesy to you. Information is accurate to the best of Liberty Mutual’s knowledge, but companies and individuals should not rely on it to prevent and mitigate all risks as an explanation of coverage or benefits under an insurance policy. Consult your professional advisor regarding your particular facts and circumstance. By citing external authorities or linking to other websites, Liberty Mutual is not endorsing them.