Protecting Against Business Losses in a Disaster

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Release date: 
July 30, 2008
Release Number: 
1770-037

LINCOLN, Neb. -- When a disaster happens, business owners can suffer a double whammy: the owner may have to rebuild a substantially damaged business and at the same time is without revenue to pay employees and cover expenses. Avoiding business losses should be a priority for owners.

"The effects of a business being closed for long periods of time are bad for the economy and the health of a community," said State Coordinating Officer Cindy Newsham of the Nebraska Emergency Management Agency (NEMA). "There are several actions we recommend business owners take so they can be up and running quickly after a disaster."

According to disaster officials from the Federal Emergency Management Agency (FEMA) and the State, the first consideration during a disaster is the safety of employees; second is the protection of business records and inventory. To handle these concerns successfully, they remind business owners, disaster preparedness should be a normal part of business planning.

Here are some of the steps officials recommend:

????? Personnel

  • Have an evacuation plan that provides for everyone on the premises to leave the workplace quickly.
  • Have a plan for sheltering in place should the event require it.
  • Maintain two-way communications with employees before, during and after a disaster.
  • Establish a means of contacting employees who have been displaced from their homes by the disaster.
  • Make arrangements for staff to be able to contact the business if it is forced from its normal location.
  • Maintain a list of key telephone and fax numbers (employees, customers, vendors, bankers, attorneys, insurance agents, professional recovery services, equipment rentals and emergency agencies).

????? Operations

  • Become acquainted with the risks for the business in its location (e.g., flood, fire, tornado, etc.) and plan accordingly.
  • Identify operations critical to the company's survival and recovery.
  • Decide which personnel and what records, procedures and equipment are necessary to keep the business operating.
  • Preserve vital business records, financial data, accounting records, personnel information, marketing strategies, insurance records, inventory information, etc. Back up computerized records daily and store the backups, along with other vital records off-site at least 500 miles away.
  • Establish procedures for succession of management.
  • Plan how to continue operating if the building, plant or store is not accessible.
  • Prepare for lengthy power interruptions during and after a disaster. Arrange for alternate power.
  • Conduct an insurance check annually to assure coverage meets the specific risks at the business site, to be sure both the building and its contents are covered and to protect against business interruptions. Most hazard insurance policies do not cover flood losses; a National Flood Insurance (NFIP) policy may be necessary.

"Any business's employees and co-workers are the company's most valuable assets," said FEMA Federal Coordinating Officer Willie Nunn. "Not only should they be protected but an effective disaster preparedness plan will contain their input at all levels of disaster planning and response."

Extensive information on business preparedness and free sample emergency plans, business preparedness checklists and more are available by calling 1-800-BE-READY (237-3239). Preparedness information can also be downloaded at www.ready.gov/business and at www.sba.gov/services/disasterassistance.

State and FEMA officials added that individuals and business owners who were affected by the storms, ...

Last Updated: 
July 16, 2012 - 18:46
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