By Tom Bone, Risk Insurance Advisor with ISU Insurance Services

All too frequently, we learn how Mother Nature and man-made events affect businesses, employees, and families. Weather, earthquakes, fires, and other events damage property and cause injuries, interrupting business operations.

We all know the keys to running a successful organization: make the right plans, execute them, measure progress along the way, and make those all-important adjustments to achieve the outcomes we are striving for.

So why do business leaders talk about creating an action plan to address their needs when disaster* strikes…but make it such a low priority that they fail to follow through?

All formal and informal surveys about disasters tell us the survival rate of affected businesses is dismal. According to a report from FEMA, “forty percent of businesses do not reopen…and another 25 percent fail within one year.”

Too many decision makers act like “high-stakes gamblers” and fail to remember that the “house” always holds the best cards.

Let me share my first-hand knowledge of some “bad bets.”

A while ago, a fire occurred in a remote part of a building in which a small San Francisco Bay Area manufacturer operated. Fire swept through the entire structure. Even though the business was adequately protected by insurance, unique property and valuable records were destroyed without any backup or duplication.  The business was unable to restart its operations. The owner lost a significant financial and personal investment, and employees were out of a job. Since the owner felt this could never happen to him, no prior thought was given – there was no action plan to help him continue operations after the damage occurred.

 The recent Northern California fires damaged an established bookstore. The loss included books as well as valuable rare book research the owner had conducted over many years. The energy and countless hours the owner had invested in this historical information were gone forever. This business has yet to reopen, and the proprietor now feels a great personal failure because basic steps were not taken to protect the decades of research needed to grow his business. It is unknown how the business can continue, and the owner is at a loss what to do for the remainder of his life.

Even though these tragedies are well publicized, employers continue to use excuses like the following to justify their lack of action and irresponsibility:

 “I’m just too busy running my business—there’s no time to take on another project.”

  • “It’s too costly to do.”
  • “Everyone in our company knows what to do when a disaster happens.”
  • “I don’t believe a disaster will occur in our area, or that it will affect our business.”
  • “It’s not important enough to do.”
  • “FEMA and the government will help us.”

A risk management colleague recently helped a business create a disaster plan that the company also felt was a great marketing tool. They used this program to promote their reliability, differentiating them from competitors. They promoted the idea that no matter how difficult things may be, they will always be available to help others when needed. Quite a novel idea, don’t you think?

Have you ever thought you may be in an area prone to disaster? If your business is located near any of the following, you have a reason to be concerned:

  • On or near an earthquake fault
  • Near a bay or other waterway
  • In a known flood area
  • Near a freeway
  • Near railroad tracks
  • In a high-crime area
  • In an industrial area where hazardous businesses operate, i.e., chemical, fuels, gas, scrap, or recycling


Create Your Business’s Disaster Plan

Step One—My team and I prepared a guide to help you create your disaster plan. The guide is thorough and thoughtful, with sample forms to make it easy for you to complete your plan.

Step TwoClick here to download your copy of How to Succeed After a Disaster.

Step Three—If you want some assistance creating your plan, contact me and we’ll get it started together.

Don’t be like so many decision makers who put off this critical planning—act now!

How to Reach Me

Tom Bone, Risk Insurance Advisor with ISU Insurance Services
2266 Lava Ridge Court, Roseville, CA 95661

Email: tbone@risksnthreatsmatter.com
Office phone: 916-960-8758; Mobile phone: 925-285-6790

* A disaster is any event that disrupts or destroys your business operations.