Is Your Company Prepared for a Disaster

by Sheryll Bonilla, Esq.

Evaluate Your Company’s Risk
What kinds of emergencies happened in the past? What could happen because of your location, design or construction of your facility, or a system or process failure? Will you be affected if your neighbor is hit by a disaster?

In New Mexico, an arsonist broke into a second-floor business and set two fires within six minutes. The water sprinklers put out the fires, but also accumulated six inches of water in the financial! office downstairs

Assess Your Company’s Critical Business Functions
Which staff, departments, and resources are most important for recovery? To maintain your market share and reputation? To keep cash flow? To fulfill your financial or legal obligations? What are your irreplaceable assets? How long can you withstand an interruption to those functions?

In the Midwest, a meatpacking facility lost power after a storm, jeopardizing $10 million in frozen inventory. Securing recovery meant buying a tractor-trailer-sized 640KVA generator to keep meat frozen while utility companies were restored to power.

Prepare Your Supply Chain
Ask your key suppliers about their recovery plan and if they have tested it. Have alternate vendors to eliminate failure at a single point. Educate your clients about being prepared. Insure what you cannot protect.

Write Out Your Emergency Management Plan
Design a program to efficiently respond to an event, minimize its impact, protect your customers, and prepare for recovery. Make sure you have access to the information you need to make important decisions and get information to the right people. This includes notifying and managing your staff, clients, vendors, and suppliers.

What is the company evacuation plan? Do you need to safeguard your IT equipment? Establish duplicate facilities? Institute a fail-safe phone system? Will you recover in mobile offices rather than lay off or transfer employees?

Plan for An Alternate Location
An alternate site can minimize the disruption. Mobile recovery is a portable building delivered to a specific location and is ideal for small to medium-sized businesses. It is a cost-effective solution with a high level of flexibility. Another option is using a different site within the same company.

Back-Up Your Data
Most IT professionals recommend automated, daily, data back-ups. Secure, off-site, locations (“cloud”) for storing data is a good idea. Test your data back-up regularly to make sure it works properly

On testing its disaster recovery plan, an Arkansas bank found that critical telephone contract information was missing for its employees. It updated its plan to include redundant contacts and have information stored in multiple locations.

Prepare a Crisis Communication Plan
How will you manage communications with your employees, key vendors, suppliers, clients, and the community?

Have an emergency contact list (cell, landline, other) that is also stored remotely for easy access. Consider a 24-hour phone tree; password-protected web page for centralized emergency status; a call-in recording system; e-mail alert system; Or text/data alert system.

Set up an alert notifications program by explaining its purpose to your staff, updating it regularly, and routinely testing it. Use social media/online communications to post status updates on recovery, direct clients, or staff to alternate locations, and provide emergency contact information and instructions. Test your website to make sure it doesn’t crash in case of a spike in internet visits.

How will you let customers know you are open after a disaster? One Midwest credit union lost its signs during a tornado. It knew a sig vendor that could accommodate its need for banners and signage after the storm, to let customers know it was still open.

Put Together Your Emergency Supply Kit and Review Your Insurance Coverage
Include paper money to buy critical supplies in case electronic systems are down. Ensure coverage for all potential risks. Keep photos of your building, equipment lists, and policy information stored in a safe and secure offsite location.

Consider business interruption insurance and added expense insurance. A burst pipe flooded a Louisiana office, requiring the relocation of 20+ employees. Their insurer approved the cost for a mobile recovery in their parking lot, mitigating company losses.

Test Your Plan
Test as an annual exercise, change it to ensure it will work if needed and update as necessary. Re-train employees when changes are made.

Data Restoration. Can you restore with information available? How long will it take? Can you recover to new/different hardware? Do you have the needed software?

Alert Notification, can you activate the system remotely? Can more than one person access the system?

Vendors’ Resilience. Involve your suppliers in your tests. Know their recovery plans and integrate them into your plans. Make sure you have alternate power to recover operations.

This article is for informational purposes only and is not to be constructed as offering legal advice. Please consult an attorney for your individual situation. The author is not responsible for a reader’s reliance on the information contained here.

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