We know how devastating natural disasters can be, from the destruction of properties to the emotional strain it puts on the victims. One area to consider is businesses that have been affected by some of these disasters. For most of these business owners, it is extremely overwhelming to recover and rebuild their businesses.
For example, Rene Garcia the owner of La Cabana, a Mexican restaurant and motel which was a family business his parents opened in 1992 was affected by Hurricane Irene in Fleischmanns N.Y. Garcia’s business was terribly affected by the flood, washing away part of his land and apart from the strain he must have gone through emotionally, the damage the flood cost was a red alert of $80,000 – $100,000 on his bill and sadly, insurance covered only $18,000 out of it.
Because of how unlikely it is to experience flooding in some areas, Garcia like most business owners did not have flood insurance because his property was not in a flood-prone area. The only thing he could do with the insurance money he collected was to fix the damaged roof. In addition to that, he applied for a federal government loan and was granted $23,000 which he was only able to use to repair part of the motel unit where his mother lived and replace some of the furniture. According to Garcia, he said he was at a loss for words, never expecting any flood. He said they were caught off guard and no one knew until it was too late.
Garcia’s business is not the only one to suffer this tragedy, many other businesses have suffered the same fate. According to the Federal Emergency Management Agency ( FEMA), there were about 97 major disaster declarations in 2011. In 2006, Hurricane Katrina’s eruption caused around 52 disaster declarations. Apart from the declarations from FEMA, the Small Business Administration makes a disaster declaration when up to 25 homes and businesses are affected and government insurance does not cover up to 40%.
Garcia may have received some help from the government, but not every business owner might be as lucky as Garcia was in the time of trouble. It is better to always be prepared to be able to face these challenges when they arise. These are some steps you can put in place to avoid such disasters or recover from them stealthy if they occur.
You need a backup plan
This is known in the business world as a business continuity plan. It is aimed at helping you put some strategies in place in case of a disaster. You need to make an outline and ask some basic questions like ‘how to maintain communication with your suppliers? Do you have a backup plan if vendors do not operate? What will you do when illness occurs among your employees? etc. These questions and more are what you need to ask yourself and find answers to. You can select a preferred template to use at template atEntrepreneur.com
You can also use another plan at eight planning sessions. This is from the Insurance Institute for Business and Home Safety (IBHS). They offer a number of free series in this plan which comes with assignments and with this you can set up your plan in no time.
Even though businesses pay attention to fire insurance, car insurance and other cases, most of them are not covered in the case of flood especially when it’s not a flood-prone area. Even though these disasters are not likely to happen, it is better to take the necessary steps because if by any chance they occur, it would be sad to find out that your regular insurance would not cover up to half of your loss. If possible, you can decide to add a separate policy to cover severe cases, which most of the time won’t be included in your regular insurance. The prices of these special offers would vary, depending on the policy. Flood insurance on the average cost around $600 per year and $700 per year for earthquake insurance. These prices also vary and depends on how much you purchase. You can get any of these policies in all states of the USA.
Talisman Casualty Insurance is a great way to start and weigh your options when choosing insurance policies to purchase at Talisman Casualty.
Take fewer risks
There are necessary risks one may need to take at one point or the other in any business. This is not the kind of risk to lessen. Not having a plan B is an example of the kind of risk you should not take. Always keep an eye out for unforeseen circumstances and be a step ahead. For example, if you have a business that needs constant electricity, even if you get a steady power supply, make arrangements for a generator, it might come in handy one day. Or you see a storm approaching and some of your properties e.g papers, printers etc could get destroyed, create a system to take them out of danger zones like floors, window areas so even if it rains suddenly and you’re not at the office, you won’t have a disaster to settle. These are examples of small risks, there are many grave ones that when not tackled properly could cause a great mishap in your business.
Seek External Help
Organizations like the Small Business Administration administer financial aids to small businesses Office of Disaster Assistance Business owners can seek help when there are damages, they need to fix from natural disasters. This was the step Garcia took to help him back on his feet, albeit in a small way. The rate at which SBA lends can be up to $2million with a low-interest rate of 4% and a span of 30 years. This is a good step to take towards balancing your business. It might come in handy when you least expect it to happen.