Strategies for prevention/deterrence and risk mitigation should be developed as part of the planning process.
Threats or hazards that are classified as probable, and those hazards that could cause injury, property damage, business disruption or environmental impact should be addressed.
Identifying risk
According to the federal government website, ready.gov, businesses should identify all potential risks and hazards and analyze their potential impacts. They also should identify scenarios to consider for emergency planning.
A business preparedness program should:
- Protect the safety of employees, visitors, contractors and others at risk from hazards at the facility;
- Plan for persons with disabilities and functional needs;
- Maintain customer service by minimizing interruptions or disruptions of business operations;
- Protect facilities, physical assets and electronic information;
- Prevent environmental contamination; and
- Protect the organization's the brand, image and reputation.
A company also should keep an emergency cash reserve fund and determine how much cash would be needed to survive a three-day, five-day, 10-day or longer shutdown, the IBHS suggested.
During a disaster that impacts operations, a business will need to determine how it will be able to handle payroll; purchase supplies or equipment; or relocate the business temporarily.
If a business does not have enough cash for an emergency fund, it should have a line of credit or a credit card available.
Companies should not assume that because their area got hit by a disaster that suppliers, vendors and creditors are aware of the situation and are automatically granting payment extensions, the IBHS warned.
Items, such as mortgage, lease or rental payments, may still need to be made even after a disaster strikes.
Other disaster preparedness tips include:
- Make copies of important business records and store them in a secure place far enough away in case a widespread disaster hits, but close enough to quickly access when needed;
- Keep an up-to-date list of e-mail addresses and phone numbers for employees, suppliers and insurance company contacts; and
- Review the limits of the business' insurance policy and make sure there is enough coverage to recover from a disaster.
Computer records
Computer records have become a vital part of nearly all businesses and should be included in a business continuity plan. Business operations usually are dependent on their computer system's connectivity and data communications.
If a company is aware of an impending storm, it should shut down and unplug all computer hardware to avoid serious damage due to power fluctuations. Equipment should be elevated or moved off site.
As a routine, employees should take laptop computers home each day so they can work off site if necessary, the IBHS suggested.
Determine which data and records are vital to perform critical functions and back them up on one or more types of media.
Store a backup copy on site for use during small disasters, such as a failed hard drive, and store a second copy in a safe off-site location that can be accessed during large disasters, the IBHS said.
Also, businesses should keep a backup copy of their computer's operating system, boot files, critical software and operations manuals.
The goal is to ensure data and IT systems are available when the business resumes operations.
Other computer system safeguards include:
- Backing up computer files, including payroll, tax, accounting and production records;
- Maintaining an up-to-date copy of computer and Internet login codes and passwords;
- Making arrangements with IT vendors to replace damaged hardware and software, and/or to set-up hardware and software at a recovery location; and
- Making a list of computer equipment, hardware and software critical for business functions and that would need to be ordered immediately if damaged.
Employees
Dealership staff, who often work on rotating shifts, should be made aware of the company's procedures and employee responsibilities for various situations that may shut down or hamper business operations.
The IBHS suggested the following action plan regarding employee communication:
- Determine which business functions are critical for the business' survival, which employees perform the functions and what equipment and supplies are needed;
- Designate a risk manager and a safety team who know how to react in various situations;
- Communicate to employees what their individual roles and priorities are to help secure their work areas without endangering themselves;
- Keep an updated list of employee home and mobile phone numbers, addresses, email and emergency contact information — and keep a copy outside of the business location in case the dealership office is inaccessible. Employees should review and update their contact information at least every six months;
- Create an employee telephone calling tree, an emergency call-in voice recording phone number and a designated phone number where employees can leave messages to report their whereabouts and account for themselves after an event; and
- Develop a written disaster plan to communicate to all employees.
Payroll often is overlooked in business continuity planning, the IBHS said.
Businesses should not assume that employees will continue to work without pay during or after a disaster.
Therefore, a company should communicate with its employees about payroll continuity plans ahead of time in order for them to plan for their personal financial obligations.
Customers
To ensure continuity of services, a tire dealership's key customers need to know the company can provide business as usual.
Customers will want to know if the dealership is still in business, how soon it will be back in business and how the disruption will affect their operations.
The IBHS suggested businesses maintain a current contact list for key customers, suppliers and vendors.
They also should have alternate or backup suppliers and shippers in place if a regular supplier is unable to deliver necessary products.
“You may lose customers if you cannot meet their needs due to your own business disruption. After an event, it is important to keep customers informed about the status of your business, your product or service, delivery schedules, etc., and to develop mutually agreeable alternative arrangements,” the IBHS suggested.
Dealerships should identify various ways to communicate with their customers after a disaster, such as with direct telephone calls, a designated telephone number with a recording, text, email, Twitter, Facebook, the company website, radio or local newspaper.
Insurance coverage
Federated Mutual Insurance Co., which provides insurance coverage for Tire Industry Association members, recommends that dealerships review their policy limits to determine if there is sufficient coverage in case of a total loss.
While most commercial insurance policies cover damage due to wind and wind-driven rain, coverage is generally not provided for damage from flooding.
Flood insurance is available through the National Flood Insurance Program administered by the Federal Emergency Management Agency (FEMA), according to Federated.
Businesses should make sure they have coverage for indirect damages, such as the loss of business income if forced to shut down temporarily or curtail operations.
Separate “contingent business income” or “business income from dependent properties” coverage is available to protect a business from loss due to the suspension of a key supplier or customer's operation from a covered cause of loss, according to Federated.
Some commercial property policies often include limits or even exclusions for damage caused by mold and fungus. Broader coverage may be available but can be expensive, Federated warned.
Federated is a member of the IBHS, which offers programs to reduce property losses associated with extreme weather events and natural disasters.
The IBHS provides details for creating business preparedness plans at its disastersafety.org website.
