Collector - June 2010

The size of your recovery plan should be dictated
by what you’re trying to achieve. Your plan can be a
two-page checklist or a 600-page document—it

person reports the disaster as soon as possible.

Get your employees involved in the development phase of your plan. Brainstorm scenarios with them and gather as many suggestions as possible. Staff input will also help you craft the specifics of your recovery plan. Your staff members know the essential functions of their departments better than you do because they carry out those tasks on a daily basis, so consult them when you draft your plan. Find out what software and hardware are absolutely crucial for them, how often department tasks are executed and what would be most important in a post-disaster, “bare bones” version of their department.

“Identify your critical business
functions and look through your
organization to figure out what will need
to come back up first if something bad
happens,” Boyd said. “From there you
can work backwards to figure out what
else to address. For instance, in your
company, perhaps payroll is every two
weeks. That wouldn’t be the thing you’d
tackle first because it’s not as time-
sensitive or immediate as other items,
like customer service or sales.”
You will be more successful if you get
staff members involved in your plan. It
will have more buy-in and probably be
a better plan if all business leaders have
input.

Insurance

Insurance is an excellent and necessary complement to a disaster recovery plan. You can’t financially plan for a loss if you’re not aware of what your insurance will and won’t cover. You need to know how much reimbursement to expect from your insurance company in order to put together a solid financial plan.

Find out if your current insurance adequately covers the cost to replace your facility and its contents. Take the time to review and update your insurance policy annually.

A well-designed Business Owners’
Policy can protect your business at time
when you may be most vulnerable. A
Business Owners’ Policy is designed
primarily to provide businesses with
coverage for:
General liability. •
Property. •
Business income/extra expense. •
Business interruption coverage is
triggered when an insured business must
suspend its operations as a result of a
covered cause of loss occurring to the
building. However, business interruption
coverage will not reimburse you for loss
of market if your clients and consumers
are gone or destroyed. If the disaster has
affected the entire community and you
collect a lot of local paper, you will need
to be ready to feel that affect on your
bottom line. Many clients might request
that you hold off on collecting from the
struggling community.

Understanding how your coverage
addresses these provisions is critical to
your recovery plan. It’s important to
know when business income coverage
may apply and how long it may take
to receive any payments. Do you have
enough cash reserves available to tide
you over until (or if) you receive your
insurance payments?

Communications

Plan an emergency communications strategy for employees, clients and vendors and determine how you will inform each group of a disaster. Designate one person to execute the communications so there are no mixed messages.

Agility suggested companies should brainstorm the most effective ways to contact employees, clients and vendors if your phone lines are down. Employees may be best reached through text messages, e-mails, Twitter, online message boards and phone trees. Clients and vendors can be reached by e-mails, website posts and tweets, as well as radio and newspaper announcements. No matter how you initially reach your clients, be sure to follow up with a more personal and reassuring phone call to keep them updated on your situation.