There were more than 80 disaster-related declarations to the Federal Emergency Management Agency (FEMA) in 2015 and 1,060 catastrophic events in the world, according to the Insurance Information Institute.
Disasters can range from fires, floods, hurricanes and tornadoes to blizzards and landslides. While construction companies are often tasked with the rebuilding phase (meaning more work opportunities), the company itself also can experience the effects of a natural disaster.
Statistics vary, but the Association of Records Managers and Administrators notes that up to 60 percent of businesses fail within two years of experiencing a major disaster. The road to recovery can be long and arduous. However, a construction company can recover and ease the stress on everyone involved with a proper business continuity and disaster plan in place.
Proper planning can limit exposure to economic turmoil, especially if forced to close operations for a period of time. In addition, it can also limit lawsuits from clients, distributors, subcontractors or employees claiming negligence. The following tips can help a business weather a disaster and aid in the relief effort.
Prior to a disaster, do the following
- Put an emergency plan in writing and disseminate it to all employees; test the plan throughout different times of the year.
- Establish a communication strategy for employees and clients in case phone lines are down; ensure employees know how to reach one another and the line of communication if/when a disaster strikes.
- Update employee contact information regularly, especially at the beginning of any season when natural disasters are likely.
- Keep emergency kits in the office and on the jobsite.
After a disaster, cross these items off the checklist
- Keep the company’s leadership visible.
- Inform employees who are responsible for certain aspects of the business’s recovery and how the leadership team can be reached.
- Allow employees to tend to personal affairs after a disaster.
- Organize community relief or charitable efforts and encourage employees to participate.
- Assess damage: Make note of any structural damage to building(s) and note any damage to equipment, machinery or company vehicles.
- Note any lost or damaged inventory.
- As they come up, compile a list of concerns that must be addressed before reopening.
- Contact employees, suppliers, subcontractors and clients to inform them of any disruptions in operation and an expected date when they can anticipate it to resume.
- If building damage poses a safety hazard to employees or customers, have it professionally inspected.
- Properly secure the building while repairs are being made or if the relocation of business activity is necessary.
- Ensure utilities are restored and in safe working order before resuming business operations.
- Arrange a meeting employees to review the plan moving forward.
A business continuity/emergency plan is essential to have in place prior to a disaster. Following are a few key considerations for this plan.
- Set goals. For example, establish answers to questions like “Where do we relocate?” and “Who should I partner with?”
- Seek out reputable disaster restoration companies. Set up pre-arranged agreements that outline the priority of service and assessment of emergency equipment needed, so when the restoration company responds, it will have all the necessary equipment and personnel.
- Develop an action plan for each type of disaster. Note whether the company faces additional exposures based on location (e.g., near dry areas, water, plains, etc.) and ensure the company has proper insurance coverage.
- Keep copies of insurance policies and other critical documents in a safe and accessible location (e.g., a fireproof safe or backed up computer system).
- Pay special attention to areas where flammable or toxic chemicals are stored.
- Ensure everyone involved has some familiarity with and understanding of the plan that’s been made. Identify backups for current construction projects and ensure the location of all field personnel is known. Equip them with disaster safety techniques in case of inclement weather while on the job.
Testing is essential to ensure that the disaster and continuity plan actually works and that it aligns with current operations and addresses all areas of response. The plan should be tested at least annually, although seasonally is recommended, as cold and hot weather present a wide variety of issues that could be missed.