Major natural disasters, like hurricanes and storms, can cause significant financial damage to businesses, often leading to a temporary shutdown, or even putting them out of business altogether. Because natural disasters can’t be prevented or anticipated, planning for them is crucial. This means identifying key areas that would be most impacted, anticipating the types of disasters that pose the greatest risk, and proactively implementing policies and procedures to mitigate their effects.

Every business has their own unique circumstances that must be addressed in a disaster management plan, but there are five main areas that are common to almost all businesses, representing the greatest risks in any disaster scenario. When creating a disaster management plan, make sure to address each of the following:

1. Technology. From email to ordering systems, most businesses cannot run without basic technologies such as the Internet, telephone, and accounting/financial systems. Whether due to physical damage or a power outage, loss of technology systems must be anticipated.

2. Facilities. Loss of access to facilities is another common challenge. A business’ physical location can be destroyed, resulting in the loss of records, products, and storefront/office. This could be due to flooding or other hazards, and while access may eventually be restored, businesses must have an interim location plan.

3. Staff. Key staff members may be unable to get to work or even be contacted, and the larger workforce must know what to do in an emergency loss of access. A communications plan is especially important during a crisis.

4. Suppliers. Most businesses have key suppliers. What if they are hit by a disaster? Entire supply chains can break down in extreme cases.

5. Customers. Certain types of businesses, such as restaurants, may close down completely during a disaster, but other businesses must continue to serve customers and that has to be a priority in disaster planning. Similar to key suppliers, if customer service is outsourced, then plans must address what to do if these operations are hit by disaster, too.

A disaster management plan should address any potential scenarios and include, at a minimum, roles and responsibilities, emergency procedures, a communications plan, and a process for training, testing, and maintaining the plan. Copies of the plan should be distributed to all individuals with responsibilities.


Sometimes it’s possible to predict when and where a storm will hit. Other times, businesses are totally caught off guard. Regardless of the scenario, or how robust your disaster management plan is, there are a few practical steps every business must take in the wake of a hurricane or storm.

Protect your property. Board-up windows and remove or tie down any exterior equipment.

Protect your physical records. Tarp your essential documents to keep them from exposure to the elements.

Take pictures. Take thorough pictures of your property, inventory, roof, and all building renovations. This is essential for the claims process to minimize any “pre-existing” condition arguments made by the insurance company.

Back up business-critical information. Your database and records are key to your business. Make full copies and keep them off-site. These records are essential to mitigating your exposure and documenting a claim.

Keep a complete copy of your insurance policies. Consult with your insurance team member to make sure you have the appropriate and adequate coverage in place.

Have a response team in place. Speak with your insurance claims management team to put together your first response team in the event you sustain damage as a result of the hurricane or storm.


The ultimate goal of disaster management planning is to resume normal operations as quickly as possible post-disaster. Most organizations — even those without an adequate disaster management plan — will “freeze” post-disaster, unsure of their first steps. Here’s what you need to do.

Document the damage. Take post-loss pictures and/or video, including the debris pile, prior to any clean-up. The key to quickly recovering losses is to document property as a matter of course and update the record regularly. If property is documented, photographed, and videotaped beforehand, insurance claims can be processed quickly and efficiently.

Protect your property from further damage. Contact your first response team to perform emergency work such as putting up tarps, pulling wet drywall and carpet to prevent mold, water extraction and drying, boarding up openings, and protective fencing to protect your belongings and keep others from getting hurt.

Rent equipment. If necessary, you should arrange to rent equipment (i.e., generators, boilers, water heaters) to restore your operation.

Beware of contractors asking you to sign contracts for non-emergency services. You should not make any permanent repairs to rebuild your business until your insurance carrier has assessed the scope of the damage as well as the cost allowed for the repair/replacement of the damage.

Document all your post-loss activities. Document and retain all receipts of all post-loss actions. Carefully record all extraordinary expenses, as proper documentation can speed up the claim process. Insurance brokers, agents, and claims professionals should be contacted before hiring any outside agencies. Do not sign contracts for non-emergency services before speaking with your insurance representative to make sure the cost is covered and under what circumstances.

It may be necessary to hire your own experts. Your insurance claims management team should counsel and guide you through the claims process to ensure that you get a full, fair, and expedited claims resolution while you concentrate on getting your business back up and running.


While it’s impossible to foresee the future, it’s not only possible — but critical — for businesses to prepare for the possibility of a disaster. This is doubly true for small and mid-size companies that may have limited resources to recover after a devastating event.

The frequency and cost of disasters is increasing and businesses that do not plan ahead risk losing everything. The best chance of weathering the storm is proper disaster management planning.

Publication date: 11/7/2016

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