How to Recover From a Disaster
Disasters are devastating events – both emotionally and financially – that are not easily overcome. Don’t expect that things will ever get back to normal; they rarely do following a major disaster, according to the Public Entity Risk Institute (www.riskinstitute.org). But you can take the following steps to see that your business continues to operate.
Execute your business continuity plan
If you’ve anticipated a possible disaster by creating a disaster continuity plan, now is the time to put your plan into action (hopefully you have a copy of the written plan offsite that you can access).
Access your options. Don’t assume that re-opening your business is the only alternative you have. As difficult as the decision may be, you may prefer to simply close up shop and start over at another time or at another location, retire or work for someone else rather than sinking money into an enterprise that may not succeed in the long run. This decision is based on your personal situation (e.g., your age, the pre-disaster health of your business) as well as what may have happened to your customers as a result of the disaster.
The disaster can be a life-changing event. Take time to make the right decision about your future based on rational information rather than emotion.
Re-open your doors. If you want to stay in business, clean up your existing space or, if necessary, find an alternative location at least temporarily. Recover your computer data from off-site storage facilities. Contract staff to alert them to time and/or location changes for your business.
Make insurance claims. Contact your insurance company immediately. It will assist you in submitting a claim for damages. Where necessary, submit claims for property damage to pay for repairs as well as claims under a business interruption policy to obtain money to pay expenses, such as rent at an alternative site.
Handle your stress. Don’t underestimate the personal toll that a disaster can take on you and your staff. Recognize the problem and, if necessary, seek professional help.
Interim actions
If you do not have a business continuity plan and disaster strikes, take immediate action to continue your business activities.
Safety.Check the conditions of your facilities to make sure they are safe for your staff and customers before re-commencing operations. Where necessary, have a structural engineer look things over. If there are safety concerns that cannot be remedied immediately, seek an alternative place to operate temporarily.
Assess damages. In order to submit an insurance claim or seek government loans or assistance, you need to document your losses. Create a check-list of the damages you’ve sustained, including loss of inventory, equipment, etc.
Clean up.Damage from storms and fires may be readily cleaned up. Use a professional cleaning service (the cost may be covered by your insurance).
Restore services.In order to operate from your usual location, make sure that power and phone service is restored. Where applicable, also see that sprinkler systems are operational.
Make repairs.Temporary repairs can be sufficient to put you back in operation if all that is needed is a new window or a patch in the roof.
Check tax filing extensions. The IRS may grant additional time to file certain returns; no extensions are possible for information returns (e.g., Forms 1099). It can also waive interest and penalties on income taxes, but not on payroll taxes. To learn about federal tax relief, go to www.irs.gov and click on “The Newsroom.”
Long-term actions
Where damage is substantial and insurance does not adequately cover your loss, you may require additional funding to restore your business to its pre-disaster condition. The American Red Cross and other private organizations usually do not provide assistance to small businesses, but government agencies may help.
Obtain an SBA loan.The Small Business Administration provides two types of assistance:
To apply for an SBA disaster loan, go to www.sba.gov and click on “Disaster Recovery.”
FEMA assistance.If your losses occurred in a federally-declared disaster area, you may be eligible for help from the Federal Emergency Management Agency (FEMA) (www.fema.gov). The SBA is the main source of disaster recovery funding, but FEMA can direct you to other resources to supplement your insurance recovery and SBA assistance.
Review insurance coverage.How well did your existing policies protect you? Where necessary adjust your coverage for greater protection against future disaster.
Create a new disaster recovery plan. Lightening usually doesn’t strike twice in the same place, but just in case it does, be prepared.
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