By Caterpillar | Posted: October 1, 2021 | Revised: March 28, 2022

Different disasters come with different risks, and it's important to understand the possible effects of every type of catastrophic event. For example, natural disasters can come with mandatory evacuations, and your business may have to shut down for a period. Ask yourself:

• How will you prepare for this event with minimal financial impact? 
• Do you have insurance for property damage?

Business disaster prep encompasses several areas. Unlike preparing for a disaster at home, your business may have a large network of customers, employees, and vendors. An essential component of safety and preparedness is defining plans and expectations for everyone involved in your company. 

Pro tip: establish a disaster planning team to assist with plan development and communication efforts.

Your disaster plan should have 3 components:

1. Emergency Preparation Plan - This includes preparing an emergency kit and making evacuation plans. These two areas will play the biggest role during the disaster. Consider how you'll secure your building when you leave, how employees should exit the building, and what items you'll need in a grab-and-go kit. Your plan should include:

• Essential supplies and equipment (in a safe location)
• An evacuation plan
• Emergency contact lists for employees and vendors
• Employee assistance programs
• Data backups and digital programs for valuable information
• Property, equipment, and product documentation
• An understanding of insurance coverage and relevant contacts

Your two priorities during the preparation phase are your people (employees and customers) and your assets. Think about the steps you can take to protect them — both physically and financially. 

While this isn't a comprehensive list for disaster prep, it can help keep you and your team more informed when an unexpected natural disaster occurs. Reference the Ready.gov website for detailed guides on developing response plans for specific disasters. And be ready to act. Take advanced warnings seriously and don’t wait until the last minute to get prepared.

2. Continuity Plan To Meet Industry Regulations - Without a continuity plan, your business could run into some unwanted trouble. Some industries, like health care and government, have strict regulations for disaster prep and continuity. While you can incur fines from regulatory organizations, you can also jeopardize relationships with customers, vendors and other business that rely on you.

Continuity plans can help keep operations going by outlining processes and contingencies. They address every aspect of the business that may be affected. To create one of these plans, you’ll need to identify:

• Team roles and responsibilities
• Tasks needed to uphold operations
• Maintenance procedures
• Communication plan with employees, vendors and customers

3. Recovery Plan For Support And Assistance - A recovery plan can help get your business up and running (and generating revenue) after disaster strikes. Here are 4 things your plan should include:

• Assess the damage and evaluate the state of your business and assets only after the danger has passed. Communicate with employees and clients accordingly.
• Know your options for financial assistance after disaster strikes. The U.S. Small Business Administration offers tips to help get you started.
• Review your insurance policies and submit claims.
• If you're a Cat Financial customer, you may qualify for additional support. Review these resources for more information.

Now that you've defined your plan, it's time to put it into action. Here's a few tips to make it a success:

• Communicate frequently leading up to peak potential disaster season(s)
• Hold regular training and encourage questions and feedback
• Make adjustments to your plans as needed

Disaster plans aren't as common as they should be. Why?

• “It won’t happen to me.” You'll be hard pressed to find many locations in North America that aren’t at risk for a disruptive event – earthquakes, tornadoes, hurricanes, high winds, wildfires, volcanos, ice storms, blizzards, and, of course, man-made hazards.
• “It takes time.” It does. But having a plan will be worth it when you're able to continue operations while keeping your people safe.
• “I don’t know what to do.” It’s true – there’s a lot to think about. It can be overwhelming. Thankfully, there’s a wealth of good advice out there, so we’ve rounded up some helpful articles to make it easy to get started.

Check out these articles that can guide your business's disaster planning:

• Practical Advice for A Holistic Business Disaster Prep Plan: Straightforward and logical advice that’s applicable to most business types.
• Leadership and People Focused Preparation: How you handle disaster can impact company culture for the better or worse. We like the people and safety focus of this article. 
• Comprehensive Checklist for Small Business:This article gives you 21 actionable things you can do to prepare for the worst.
• Business Insurance Claims After a Major Catastrophe: Detailed advice from Forbes on getting your ducks in a row for the tax season after disaster. 

If you take the time to think about these things in advance, you’ll find that the response and recovery process is less stressful, and often less costly to your business.

We're here to help before, during and after a disaster. Reach out to your Cat dealer for rental power and equipment, maintenance and more. For insurance questions and claims, contact our team at Cat Financial.