Adequate training and risk reduction efforts keep companies and their people better protected.
For any dedicated business owner or manager, a company isn’t just a source of income. It’s the result of countless hours of hard work, dedication and strategic planning. It’s the tangible display of one’s passion, and an effort to make a difference. But even the most established business can find itself on shaky ground when the unexpected enters the mix — especially if that business hasn’t taken risk reduction efforts seriously.
At BCH, we believe that being there for clients when it matters means helping them prepare for — and protect against — disaster scenarios that could disrupt operations, compromise a team’s safety and lead to financial losses. In honor of National Preparedness Month, our risk management pros are bringing disaster planning into focus. Read on for insights aimed at helping businesses of all sorts stand better protected.
Understanding the Scope of Potential Threats
When we talk about disasters, we’re not just referring to large-scale natural calamities such as earthquakes, hurricanes or floods. Disasters can also come in the form of technological failures, cybersecurity breaches, supply chain disruptions and even pandemics. Regardless of the nature of the threat, the key is to recognize that such events are not entirely preventable — but their impact can be significantly minimized through proactive planning. Ideally, this will take the form of a well-thought approach to risk management, a commercial insurance plan that offers coverage specific to your industry and operational needs, and a disaster response plan your team is familiar with and able to enact.
Risk Reduction Efforts Build Resilience and Raise Awareness
A robust risk management strategy is the foundation of a resilient business. It involves identifying potential risks, assessing their likelihood and impact, and devising strategies to mitigate and respond to them. By conducting a thorough risk assessment, you can prioritize potential threats and allocate resources accordingly. Here are some tips that can help.
- Get a Range of Individuals On-Board: Assemble a team of representatives from various departments and levels within your organization — operations, finance, compliance, legal and beyond. Bringing a diverse group together not only helps bring new ideas to the table, but helps ensure no aspect of your operations gets overlooked. Don’t forget to get your professional risk advisor involved. He or she will be glad to sit in on discussions, guide the conversation and help you pinpoint areas to be addressed.
- Take Past Events into Consideration: A crucial way to gauge potential issues you might be up against is to look back on your business’s past. Prior data breaches might indicate a need for heightened IT security. If adverse weather is a common concern, it could be time to consider site upgrades. Even issues such as high turnover rates might hint at hiring practices that need work. Document your trouble areas and use them to guide your plan forward.
- Assess Current Operations: Are there inefficiencies in your day-to-day work that place team members at risk? Do employees understand your company’s current disaster plan? (On that note, do you even have a disaster plan?) Are there checks and balances in place to ward off internal theft? Craft a list of potential problem areas and prioritize points based on both their likelihood of occurring and the impacts they could have.
- Put a Risk Management Plan in Place: Once you’ve assessed the issues that could impact your business, it’s time to address them. Your risk advisor will help you implement systems to ward off trouble, ensure you have adequate coverage in place and can help you educate fellow team members to ensure everyone is on the same page and operating safely. Remember, quality risk management is a group effort.
The Role of Business Insurance
While risk management lays the groundwork, a well-structured business insurance plan provides an essential safety net. But it’s crucial to choose insurance that is tailored to your specific needs. For example, a business located in an earthquake-prone region would require coverage that includes earthquake damage, whereas a business heavily reliant on digital operations should invest in comprehensive cybersecurity insurance. For businesses in and around Houston, flood coverage — which isn’t included in most traditional plans — is an important consideration. Partner with an experienced insurance advisor to customize a policy that aligns with your risk profile.
Creating a Quality Disaster Response Plan
No matter how comprehensive your risk management strategy or insurance coverage is, you must have a clear and actionable disaster response plan in place. Develop a plan that takes virtually every facet of the business into consideration. Then, communicate it to team members early and often. This helps ensure everyone knows their role and responsibilities during a crisis — and can position your business for better recovery. (FEMA reports approximately 25% of businesses never reopen following a disaster.) A good disaster response plan outlines:
- Chain of Command: Clearly define who holds decision-making authority during a crisis. Make sure team members know who reports to who.
- Communication Protocol: When and how should team members report in? Establish lines of communication both internally and externally, ensuring timely updates to stakeholders, employees and customers.
- Evacuation and Safety Protocols: Who should leave if evacuation orders go out? Who should stay? For those who do stay, where should they work? If applicable, provide guidelines on how to evacuate the premises safely to ensure the well-being of all team members.
- Data Protection and Recovery: Outline steps for data backup and recovery to prevent critical information loss. Check systems ahead of time to ensure proper firewalls are in place, passwords are secure and other security considerations have been factored in.
- Post-Crisis Recovery: Detail the steps to return to normal operations once the threat has been mitigated. What happens if structural damage means you must office elsewhere temporarily? Will team members have access to necessary tools, equipment and resources immediately following a disaster? Will you need to adjust business hours to meet team member or client needs?
- Training and Drills: Turn abstract discussions into actionable plans by practicing your disaster plan to the extent possible. Run fire or evacuation drills, making sure team members know where to go and what, if any, equipment to take with them. Quiz them over the finer details of your plan. Meet multiple times to go over details and ensure everyone is on the same page.
BCH Tip: Your Human Resources department plays a crucial role in the effective implementation of a disaster plan. Download our HR Insights sheet for information aimed at helping to guide your plan development and ensure optimal protection for your operation and employees.
No one wants to consider the potential impacts a disaster situation might have on their operations and overall livelihood, but failing to plan for them can call a business’s future into question. If you’d like to know more about risk reduction or any of the above, or if you’re interested in learning how BCH’s commercial insurance and risk management professionals can help, feel free to contact our team. We’re happy to assist, and we’d love to hear from you.