What should I do to plan for a disaster to reduce my business risk?
Although all businesses face risk each and every day, a good Risk Management Plan is not based on avoiding risk. Rather, effective Risk Management is focused on supporting an organization’s strategic plan by recognizing risks and developing strategies to manage them.
There are many events that pose obvious danger to your organization’s operations. In addition, there are events that create a significant threat to your company’s ability to operate and generate revenue that you may not have considered.
For example:
What if your primary supplier suddenly ceased operations and you had no other sources of raw materials?
What if a major regional power outage occurred?
Would you have access to a generator that could provide sufficient power to run your essential operations for a week?
Do you have contracts in place guaranteeing that availability, including a fuel vendor?
Do you have Business Interruption coverage in the event a major disaster inhibits your ability to generate revenue for months?
Listed below are examples of what should be carefully considered when creating your enterprise wide disaster planning.
Contact your Wallace Welch & Willingham Agent or our Risk Management Department – 800.783-5085 - and let us help you create a comprehensive Disaster Plan for your organization.
Remember, after the disaster occurs is not the time to begin planning your response.
Disaster Planning
What is an Emergency?
An emergency is any unplanned event that can cause serious injury or physical/environmental damage, or any event that can shut down or disrupt your business operations.
What types of Emergencies are there?
Emergencies can be caused by Fire, Hazardous Materials Incident, Flood, Hurricane, Tornado, Earthquake, Explosion, Communications Failure, Major Power Outage, Civil Disturbance, Loss of Key Supplier, etc.
What is Emergency Management?
Emergency Management is the process of preparing for, mitigating, responding to and recovering from an emergency.
The Planning Process
Establish a Planning Team
Determine who will be active members and who will serve in an advisory capacity.
Develop a Mission Statement, establish authority and structure, and create a budget.
Analyze Capabilities and Hazards
Determine what is in place now. Look for existing:
· Evacuation Plan
· Fire Protection Plan
· Safety and Health Plan
· Environmental Policies
· Security Procedures
· Insurance Programs
· Finance and Purchasing Procedures
· Plant Closing Policy
· Employee Manuals
· Hazardous Materials Plans
Developing a Plan
Executive Summary (Identify personnel, responsibilities, types of emergencies, etc)
Emergency Management Elements
Emergency Response Procedures
Support Documents (Call Lists, Building/Facility Maps, etc)
Resource Lists (Suppliers, service providers, etc)
Write the Plan
Establish a Training Schedule
Coordinate with outside Organizations (Police, Fire Department, etc)
Finalize the Plan
Review the plan, conduct training and revise
Seek final approval
Distribute the plan to all personnel
Implementing the Plan
Integrate the plan into company operations.
Include the plan in annual budget considerations.
Maintain focus on training .
Emergency Management Considerations
Direction and Control
Establish an Emergency Management Group to be in charge in the event of an emergency.
This group controls all incident-related activities.
Also consider designating an Emergency Operations Center and Security Plan.
Communications
Communications are needed to report emergencies, warn personnel, keep employees informed, coordinate response actions and contact customers and suppliers.
Keep in mind that some types of communication may be impacted by the emergency, so alternative communications should be considered (i.e., two-way radios, satellite phones, etc.)
Life Safety
Protecting the health and safety of everyone in the facility is the first priority during an emergency.
Create evacuation plans with routes and timelines, and designate assembly areas, shelters, family assistance plans, etc.
Property Protection
Protecting facilities and equipment is essential to restoring operations. Establish procedures for: fighting fires, containing materials/spills, barricading windows/doors, facility/equipment shutdown, making available backup power supply (generators), and backup suppliers.
Community Outreach
Your company’s relationship with the community will influence your ability to protect your company’s property and return to normal operations.
As such, you should involve community emergency personnel in your plans and procedures.
Recovery and Restoration
Consider making contractual arrangements with vendors for post-emergency services such as: record restoration, equipment repair, generator fuel supply, engineering, etc.
Also, meet with your insurance advisor to discuss your business resumption plan.
Additional Resources: Publications from FEMA
Call WWW’s Risk Management Department – 800.7833.5085 – to assist you with your Business Disaster and Business Resumption Plans before the storm!
return to questions
Note: This is general information and does not change or supersede your policy provisions, which vary by policy and state.
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