Natural disasters can capsize your business. Small companies are especially vulnerable during this time. Comprehensive planning can help mitigate risks and keep your company functioning if disaster strikes. A strong written policy can also support insurance settlements in the aftermath of a catastrophe. Your company’s disaster policy should include at a minimum the following seven elements:

  1. Risk assessment. What segments of the business would suffer the greatest damage from a large-scale disaster? Think about locations such as retail stores, warehouses, manufacturing facilities and locations that house your computer servers. Consider steps you’ll need to take, then prioritize.
  2. Key staff identification. Employees should know in advance the people and organizations to contact, both inside and outside the company. Designate employees tasked with evacuation assistance, shutdown of special equipment, and rescue duties, if applicable. Several trusted individuals should know where important records are kept and have legal authorization to deposit checks and pay bills. In a small company, such duties may typically fall to the owner, but a second employee should be given advance approval in case of a disaster.
  3. Evacuation guidelines. The plan should specify evacuation routes and a meeting place outside the building. Maps of evacuation routes should be posted. The policy should include schedules for routinely reviewing these routes and exits to ensure they’re well-marked, adequately lit and free of obstacles.
  4. Business record security. Prioritize the security of written records and electronic data based on vulnerability to damage from different types of disasters. For example, raise computers above flood level, archive essential documents off-site, and upload electronic files to a secure internet site. Store records, such as written contracts, in a fireproof safe and keep backup copies at your attorney’s or accountant’s offices. The same is true for digital security. Have backups and a disaster recovery plan to address hackers, ransomware and other digital theft.
  5. Emergency fund. If disaster strikes, you’ll want to keep payroll flowing, suppliers happy, and customers satisfied with enough cash to cover bills for several months. Remember, if you don’t resume operations within five days of a disaster, you stand a significant chance of closing your doors for good at some point within the next year.
  6. Insurance details. Verify that your business insurance is current, and information about deductibles, limits, and coverage is close at hand. Review your policy every year to ensure common problems are adequately covered. Keep an up-to-date list of business equipment, inventory, and real estate to expedite claims in the aftermath of a calamity.
  7. Training schedule. Once a comprehensive written plan is developed, communicate and implement its requirements by scheduling regular training sessions so your staff knows what to expect. Walkthrough likely scenarios with your employees, then brainstorm to identify gaps in the plan or unforeseen obstacles.