Business Property

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Everything you need to know to plan for — and recover from — extreme weather, fires, vandalism and other unexpected events. Small business owners across the United States face more direct threats to their shops, offices, warehouses and other physical locations than ever before. You can limit the harm to people and impact to business property if you plan ahead so you’re prepared to act when something unexpected occurs.

Use this checklist to help you plan for the things that could affect your business and guide you through emergencies when they happen.

1. Develop a business emergency plan.

The surest way for your business to recover from a natural disaster — or one caused by humans — is to plan for it before it ever happens. That’s why every business needs an emergency response plan.

The first step in creating an emergency plan for your small business is to conduct a risk assessment. Work with the people on your team to come up with ideas about the kinds of things that could impact your business location and lead to physical loss, including fire, windstorm, theft, vandalism, extreme weather and more. Different people who have a range of responsibilities in your organization have unique perspectives that allow them to come up with ideas about business interruption losses you may have never thought of.

Having an understanding of what could happen is at the foundation of being able to develop plans and procedures to prepare your business so you can limit damage and recover from emergencies.

At a minimum, your emergency plan should include information about how to protect employees, visitors, contractors and anyone else who could be in your business locations when emergencies happen. It should cover things like:

  • Sending people home safely if you have advance notice of a possible emergency, for example, a blizzard is coming or a protest could become violent or destructive.
  • Evacuating in the event of fire or other sudden emergency.
  • Sheltering in place from extreme unexpected weather such as a windstorm or tornado.
  • Protecting people from an airborne hazard like a chemical release.
  • Staying safe during earthquakes.
  • Locking down during a terrorist attack or other violent act.

As a next step, your plan should include information on how to control emergency situations, such as:

  • Training employees on first aid and CPR.
  • Learning how to use fire extinguishers properly.
  • Containing chemical spills to limit physical damage.
  • Turning utility services on and off as needed to protect the business property (for example, shutting off water mains to limit flood damage.)

Finally, document what you — and the people on your team — must do after things are stabilized to get your business up and running again, including:

  • Contacting employees, customers and stakeholders.
  • Making insurance claims.
  • Cleaning up property damage.
  • Handling repairs.
  • Restarting your operation.

Your emergency plan should be tailored to meet the unique needs of your business. There are many templates available online. They are a good starting point for developing a customized plan that will keep you, your employees, your customers and others safe while getting your business back up and running as quickly as possible.

2. Survey the property damage.

Once you’re sure that everyone is safe, the first thing you should do after your business has been damaged is to survey the impact. Take time to understand what you’re dealing with. It’s difficult, but avoid being emotional. If you keep your wits about you, you may find that things aren’t as bad as they seem.

Plan ahead for surveying business property damage by preparing physical and digital copies of important documents and storing them in multiple, readily accessible locations. Also, consistently take pictures of your business and store them on the cloud. They’ll help you remember the original condition of your property when you’re trying to figure out the extent of damage. Memory is undependable during a crisis.

3. Communicate with employees, customers and stakeholders.

Communication is key when it comes to managing through disasters. You must inform employees, customers, suppliers and anyone you do business with about what’s happened and everything you’re doing to recover from it. Being fully transparent will help build trust with stakeholders and get you the support required to recover and rebuild.

Have a communication plan at the ready before something bad happens. Come up with key messages to cover a range of scenarios. Think about what channels you’ll use to communicate. The most effective in emergencies include:

  • Website. This is the first place most people look when they need information about a business.
  • Social media. People can visit your social media sites to find out what’s going on. At the same time, you can push out information to keep your followers up to date. Social media is unique because it provides this push and pull communication functionality. It allows you to get into a virtual dialogue with the people who depend on your business.
  • Email. Email is the perfect medium to send targeted information to individual audiences.
  • Text. Text messages are great for sending out timely alerts and updates.

Planning ahead will help prevent scrambling after something unexpected happens. You may not be thinking clearly during chaotic times and your communication efforts could suffer.

Tip: If computer equipment is stolen from your business and it contains information about your customers or suppliers, you’re required to communicate it to affected parties. Your lawyer or experts at your chamber of commerce can advise you on local requirements.

4. Contact your insurance agent.

Staying in close, regular contact with your insurance agent before and after an unexpected event will help ensure you have the coverage you need to get through any property loss you face, and get paid quickly for any damage to insured property you experience.

Building a personal relationship with your business insurance agent and provider helps ensure you won’t be viewed as just another policyholder when you’re trying to recover from an emergency.

Work with your agent to consider all the things that could impact your business including fire, extreme weather, theft, vandalism, earthquakes, terrorist attacks and more. Also figure out the value of the property you’re covering and the real replacement cost for repairing property damage.

Then make sure you have adequate coverage to recover from emergencies. At the very least, you’ll want to have business property insurance. Across the insurance industry, a business owner’s policy is the basis for most of the other coverage you need. Then you can get additional coverage for other issues, including business interruption losses, personal property damage and other things you might face as addendums to the property policy.

Also, make sure you have contact information for your business insurance agent and insurance provider at the ready so you can initiate the insurance recovery process as soon as possible after your business is damaged. It will help you get your insurance claim payments in the shortest possible period of time.

In challenging times, it’s probably worth the extra expense to get the right business insurance coverage. Your agent can guide you to the right insurance policy to meet the unique needs of your business.

Tip: During the COVID-19 crisis, many business owners have questioned whether business income losses are covered by their commercial property insurance policies or business interruption insurance. The insurance industry has taken the position that the answer is no. Your business insurance agent will let you know for sure.

5. Check your documents and data.

All businesses should have actual and digital copies of their documents — and data — saved and backed up in multiple locations. This includes your business licenses, contracts, leases, mortgage paperwork, legal documents, tax returns, financial statements, sales information, marketing metrics and customer records.

Following a disaster, check to see that all these things are still accessible and secure. If not, take steps to immediately recover them. You’ll need many of them to make an insurance claim and others to start doing business again.

Tip: Most businesses store digital copies of their documents online. They don’t keep actual copies in a secure safe or safety deposit box. Keeping “real” copies of your information somewhere secure could protect you should you experience a business cyber emergency.

6. Clean up and rebuild.

For most businesses, this is the toughest part of the recovery process.

The good news: You don’t have to go it alone when it comes to the rebuilding process and restoring damaged property to its original condition.

Prior to an emergency, come up with a list of cleaning companies, contractors, mold elimination experts, glass installation companies, junk removers, handymen and others that can help with clean up and recovery. If you need help finding support, your insurance company, chamber of commerce or local business development agency can make recommendations.

Another idea: Partner with other businesses in your area to hire recovery support vendors and work together on clean up. It could make the process more efficient.

7. Find a back-up location.

If the damage to your business property is extreme, you may need to find an alternate place to do business while your site is repaired. Consider this possibility as part of your emergency plan. Your business insurance agent, local realtor or someone from your chamber of commerce could help you find a place quickly after an emergency.

8. Consider what your employees are experiencing.

Some emergencies, such as a fire, only impact a business. Others, like extreme weather events, affect the whole community.

You may want to get back to work as quickly as possible after a business emergency to start earning business income. However, if your employees were affected by it as well, they may not be ready to return to work.

It’s important for you to be flexible and compassionate about bringing employees back to work at their own pace, or letting them work from home if it’s possible. If you’re able, find ways to support them and their families through the crisis. It will pay off over the long term.

9. Ensure suppliers are prepared for emergencies.

Your business might be ready to handle an emergency. What about your suppliers and the other vendors you work with?

If your business recovers quickly after a crisis, but your suppliers don’t, you won’t be able to return to doing business as usual. Partner with your key suppliers to ensure they have reopening plans that align with yours. While you’re at it, come up with a list of back up suppliers, just in case.

10. Ask for help.

During and after a disaster, neighbors want to support neighbors. The coronavirus crisis proved it.

The people in your community value your business. They’ll want to help it recover as quickly as possible. Instead of making them figure out how to help, why not ask — or tell — them? You’ll be surprised by all the ways people will be willing to pitch in. Some may purchase a gift card. Others might pick up a paint brush. You never know until you ASK.

11.Consider what lessons you learned and update your plan and business property insurance.

A business interruption is unfortunate. It’s also an opportunity.

It could give you a chance to look at your operations and figure out if there are ways to improve your business model. If you’re being forced to go through the rebuilding process, why not do it right?

After an emergency is over, take time to think about your experience. What things helped you keep people safe and get your business up and running quickly? What things didn’t work out as well? Leverage this information to improve your business plan and update your business property insurance policies. After all, because your business has already experienced an emergency doesn’t mean it’s immune from another one.

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