Businesses encouraged to prepare plans for natural disasters

Natural disasters can take a natural toll on the course of daily business, even closing businesses for days, weeks or months.

The State Corporation Commission encourages businesses to have a disaster plan.

Some businesses are unable to reopen following a natural disaster, according to the SCC, and others fail within one year of a disaster.

Natural disasters that happen far away can even have an impact on businesses close to home, including hurricanes, floods, tornadoes, wildfires and earthquakes by disrupting supply chains and communication. Small businesses are especially vulnerable because they often have fewer resources, locations and employees.

“How you plan for and respond to disasters can determine whether your business survives,” Virginia Insurance Commissioner Scott A. White said in a press release. “Protect yourself and your business against the unexpected by having the insurance coverage you need and updating it regularly.”

Advance planning, physically and financially, can safeguard businesses against disruptions created by a natural disaster. The SCC’s Bureau of Insurance offered tips, such as understand risks, including the potential danger of natural disasters; have emergency disaster and business continuity plans in place; make sure your insurance coverage is up-to-date by reviewing policies and making adjustments as needed; and know how to respond if disaster strikes.

The Bureau encourages individuals to educate themselves about insurance policies, how much money you may need to make repairs and pay employees, creditors and yourself in the event of a disaster. In the event of a disaster, you may have to consider your deductibles, coverage limits and exclusions; whether additional or separate coverages are needed, such as coverage for damage related to floods or earthquakes, which are not usually covered by standard business insurance policies; whether you need to buy separate automobile insurance for business vehicles; whether your business and its contents are insured for current replacement cost; and if you need business interruption insurance to cover loss of income that your business may suffer after a disaster.

Steps small businesses can take include sharing business continuity plans with employees that include current employee contact information, backup vendors or suppliers and a temporary relocation site; developing a communication plan and procedures for work processes and payroll during a disaster or business interruption; and keeping preparedness items onsite at your workplace.

The Bureau of Insurance offers free consumer guides for businesses. To learn more, call toll-free at 1-877-310-6560 or in Richmond at 804-371-9185 or visit scc.virginia.gov/pages/Insurance.