Once the worst of a natural disaster is passed, the struggle for survival may have just begun for your business if your operations have sustained damage. From filing insurance claims to keeping customers informed, here are five steps to take after you count your blessings.
1. Contact your insurer immediately. Inform yourinsurance company before cleaning up any damage so you can get an accurate estimate. After a disaster, many insurers have a quick-response team that will come out to survey the situation. If your business cleanup includes removal of items such as water-damaged merchandise, flooring or insulation, keep it all. The damaged materials are all evidence of the impact of the disaster on your business.
2. Seek assistance. The Small Business Administration may be able to provide some financial help. Through the agency's Office of Disaster Assistance, any business, regardless of size, that is located in a declared disaster area can apply for low-rate, long-term loans to help recover from physical damage. Even if your property was not damaged, you can apply for a working capital loan from the SBA to relieve the economic injury caused by the disaster.
Eligible businesses may borrow up to $2 million for up to 30 years to repair and replace property, machinery and inventory at a 4 percent interest rate. For uninsured or under-insured losses, the loan may be increased by as much as 20 percent of the total amount of disaster damage to protect the property against future disasters of the same type.
The SBA can also help you repair your home – renters and homeowners can borrow up to $40,000, also at 4 percent for up to 30 years to repair or replace personal property damaged or destroyed in a disaster, and up to $200,000 for home repairs.
More information about these loans is available on the SBA website.
3. Stay on top of communication. Once the worst is over, let your customers and clients know what’s happening. Update the home page of your company’s website to let customers know if your ordering, shipping or inventory is affected, and if or when you expect to be open for business, also consider sending a message of well wishes and concern with a status update on your company’s Facebook or Twitter pages.
Be honest about what is happening, how long you except it to be before you are running at full capacity, and give a detailed as possible operating plan for your recovery period. People will realize that yours is a company that knows how to deal with its problems, and then you will have their trust.
4. Don’t count on FEMA for quick help. If your business is in a federally declared disaster area, federal aid will be available, but it can move slowly, especially when many claims are being filed. It might provide homeowners with temporary shelter and eventual money to rebuild. But for a business owner, your private insurance or an SBA loan will be your best chance at receiving money fast.
5. Create a backup plan. Your company should have a business continuity plan in place already, but if not, now is a good time to get ready for the next time a disaster of any kind affects your business. A business continuity plan outlines how your company will respond to a disaster, including such crucial questions as: How will we keep filling and tracking orders? If vendors aren't operating, do we have a backup? What if employees can't make it to work? To get started, or update your current plan, check out this Business Continuity template.
If you don’t already, also consider putting a data recovery plan in place for your most important files. Research data recovery vendors, and cloud services now, while the topic is fresh in your mind, so you’ll be prepared the next time disaster strikes.
5. Beef up your insurance coverage for the future. Many businesses aren't protected in the event of an earthquakes or flood -- especially if they aren't located near fault lines or floodplains. Businesses should note that many standard policies don't even cover wind damage from a hurricane or utility disruptions from a storm, so review your policy's fine print to understand your coverage.
You may want to consider adding a rider or a separate policy to cover losses from severe weather that aren't included in your existing insurance policy.
BY KATHLEEN DAVIS
