In the event the office or jobsite lost power or was totally destroyed during a wildfire, hurricane, tornado or other type of natural disaster, how prepared would your company be? Have alternative premises been identified to set up operations? Would employees know who to call or where to go?
The recent wildfires in San Diego County serve as a reality check for businesses across America. Although damages weren’t nearly as severe as other wildfires Southern California has experienced during the past 10 years, they underscore the need for appropriate insurance coverage and limits, and for having a basic disaster recovery plan.
Disaster recovery is a risk control technique. Risk control is anything that can be done to lower the frequency and severity of a claim. Disaster recovery won’t reduce frequency, but it will definitely reduce severity. In some cases, an effective disaster recovery plan, supported by a correctly written insurance program, can be the difference between a business’ survival or failure.
According to the forecasting firm Eqecat, “Superstorm Sandy” in October 2012 was the second most expensive storm in U.S. history. At least 286 people in seven countries were killed along the path of the storm, including more than 125 in the United States alone. The estimated economic damage exceeded $68,000 billion, and 8.5 million businesses and residences lost power. Though many companies were unharmed during Hurricane Sandy, their employees could not, or would not, return to work for various reasons.
Following are some thoughts and lessons learned from Hurricane Sandy on how to better prepare for disasters so employees can return to work in a timely manner.
- Cross-train employees. Regardless of a disaster’s impact on business, if an employee’s family is displaced or affected by a crisis, he or she will respond to family first and the employer second. Plan on how to continue operations if key personnel are unavailable due to family emergencies.
- If a work-from-home scenario is part of the disaster recovery plan, plan for the risks of power loss, communication interruptions, inconsistent Internet access and the inevitable distractions encountered when staff are working in a home environment.
- If employees must be in the office or on a jobsite, how will they travel to work when public transportation and fuel are cut off? Consider establishing carpool protocols or hiring a transportation service. For future events, consider storing fuel onsite for distribution to key personnel. Be sure to follow official guidelines for fuel storage and distribution.
In every crisis (large or small), communication is the key to recovering quickly. When planning, communications should be a top priority. Following are some suggestions for developing a crisis communications plan.
- Having a single carrier for phone, Internet and mobile access is a major point of failure. Diversify communications providers for an extra layer of resilience.
- Because communication is the key to any recovery, mobile service is a typical bottleneck during a regional crisis. For example, during Hurricane Sandy, smartphone power and network access were either limited or simply not available. Be sure to have a solar-powered or hand-crank charger for mobile devices. For those in health care, government, security, etc., consider satellite communications tools, including phones and Internet providers.
- When bandwidth is limited, text messaging might be the only means of communication. Know how to send texts to employees, staff, vendors and customers. Consider implementing a system for sending mass texts or email-to-text messages.
- Think about the different audiences to communicate with immediately following a disaster: family, employees, partners, investors, vendors and customers. What is the message to each audience? With effective communication, most people will be able to accommodate short-term disruptions and will remain loyal customers. However, with no communication, they might simply find another provider.
Sometimes, the smallest detail can have the greatest effect on the ability to recover during a crisis.
- Know local emergency management, political leadership and law enforcement. Knowing these leaders can make or break recovery when it comes to outside assistance making it into a restricted area, or finding out key information that can aid in recovery.
- Take pictures before, during and after the crisis (if it is safe to do so). It will help aid the recovery effort and ensure that insurance has enough information to quickly and properly process claims.
- Knowing the electrical demand ahead of time is critical. It can save time and potentially thousands of dollars when making decisions in the midst of a crisis.
- If the generator is elevated to avoid flooding, make sure the fuel supply is elevated as well. Fuel sources or pumps to deliver fuel to a generator that are below or at ground level can be compromised by floodwaters. Additionally, any generators elevated above ground will be difficult to refuel. During Hurricane Sandy, some hospitals were forced to hand-carry containers of diesel fuel up dozens of flights of stairs to refuel rooftop generators.
- Have more than one fuel vendor available. Perhaps no other frustration attracted more media attention than the lack of fuel for both backup generators and vehicle use. Supply lines can be interrupted hundreds of miles away, and local rationing can be imposed at any time. Be sure to have multiple vendors in the event a primary vendor’s operations are interrupted.
There are companies that specialize in helping businesses create disaster recovery programs. Regardless of whether a company uses a specialty vendor to help build a plan or elects to devise its own, the key is having a plan. Many businesses never recover from a disaster; it is up to management to make sure the company survives.