Preparing for disaster: How to stay afloat when catastrophe strikes By Kathleen Furore
November 5th, 2011

Imagine this scenario:

You’ve just contracted for one of the biggest tile jobs your company has ever tackled. Papers have been signed and plans drawn. You’ve stored some materials while waiting for others to arrive before work can begin.

And then it happens. A storm hits, downing trees, flooding homes and workplaces, and cutting off electricity to many businesses in your area.

It happened to Mosaic Tile Company’s location in Raleigh, N.C.—one of 10 design centers the company owns throughout North Carolina, Maryland and Virginia—when violent tornadoes roared through the state April 16.

“It tore the roof liner and some of the middle roof off, sucked the garage door into the space next door, and pulled the concrete block demising walls over so they were hanging by the roof trusses,” Chris Hughes, regional sales manager, recalls. The walls separated Mosaic Tile from Agricultural Granite & Marble’s (AG&M’s) space next door.

“The tornado sucked up tiles, and hit the sprinkler system and gas pipes,” Hughes continues. “One of the air conditioning units on the roof was thrown off, others were rolling around, and gas was leaking. It was a bad day here.”

Hughes’s story is one of myriad that have been told as tornados, hurricanes, floods and fires have wreaked havoc nationwide. Yet while these disasters have made headlines, most businesses have no plan in place to ensure they can continue operating if disaster strikes.

Do you have a plan that will keep your company afloat?

“Catastrophes are not selective about who they affect. They affect homeowners and business owners alike,” says Gail Moraton, business resiliency manager at the Insurance Institute for Business & Home Safety (IBHS). “But when a business is shut down by a storm, the owner loses his or her livelihood and the community loses a business. Taking steps now to prepare will improve a business’ chance of not just re-opening, but also remaining open.”

And it isn’t only major, news-making disasters like the North Carolina tornados, Hurricane Irene or Hurricane Katrina that cause chaos. Even a local, short-lived power outage or flood could disrupt your business significantly and irreparably damage not only your workplace but also your bottom line.


Creating a plan

Being unprepared to cope with disaster is the biggest error companies commit, industry experts say.

“One of the most common mistakes we’ve seen companies make is not having a contingency plan—not creating a list of emergency contacts for business services such as the utility company, a restoration contractor, electronics/computer services and insurance [claims],” Pete Duncanson, director of training at ServiceMaster Clean, says.

Numbers for the police and fire departments also should be included, the IBHS notes.

Making lists, however, isn’t enough, Moraton stresses. “If those lists are in the building that’s been damaged, how are you going to get it? Have copies of your key contact lists at home, in the trunk of your car, or on a thumb drive you keep somewhere safe—that is the best thing you can do for your business,” she says.

Keeping customers informed about what is happening with the products or services they’ve ordered is another important step. “Put your status on your website and leave a call-in number where you can receive recorded messages,” Moraton suggest.

You also should know if you have business interruption insurance (which helps replace the income your business would have generated if it hadn’t been temporarily shut down by the disaster), and fully understand the coverage before disaster strikes. If your insurance plan includes a business interruption clause, prepare a list of steps required for your business to promptly resume operations on a full or even partial basis. Financial considerations should include payroll and debt needs and obligations, the IBHS explains.

Hughes admits he had no protocol in place to deal with such devastation. However, Mosaic Tile was fortunate to have not only insurance, but also staff from the company’s corporate office in Chantilly, Va. to help from almost the moment the storm subsided.

“Of course no situation like this is ever ideal, but the crisis team was able to keep us functioning and open throughout the reconstruction process,” Hughes says. “They came out and videotaped the site for insurance purposes. Insurance covered some of the loss, and the building owner’s insurance paid for some of the damage…but it’s a never-ending battle.”

“Think about what equipment you have, what your ordering process is,” Moraton says. “You need a business continuity plan. Your business might have burned or been flooded out, but perhaps you could partner with another like business. Whatever you decide, create and then save the plan now because you’re not thinking straight in the middle of a disaster!”


Clean-up and recovery

Once the initial shock of the disaster has subsided, the clean-up process can begin. One mistake many business owners make? “They think they can handle the situation themselves, causing more damage and delaying the restoration process,” Duncanson says.

Water damage can be especially problematic if not dealt with promptly.

“Do not wait to call for professional help. Damage from the water and bacteria growth can begin within hours,” Duncanson says. “After flooding, the potential for mold is there, and you have other bacteria that enter the building as the waters rise.”

Duncanson suggest drying or discarding wet items within 24 to 48 hours to avoid mold.

“Even after wet items are removed, mold may remain hidden in drywall, carpeting and HVAC systems. While bleach may be used to control mold, it does not kill it,” he says. “Removing mold requires cutting away damp drywall and sanding wood. The sooner a remediation expert can get to those things covered in mold the less long-term damage.”

Mosaic Tile did not make the mistake of proceeding without professional help. The company hired Cary Reconstruction Company to clean up and move undamaged materials to a temporary showroom, where the team will remain until the original space is gutted and rebuilt to ensure structural stability.

“Ironically, there was an empty location right next to us in a neighboring building owned by the same people who owned our building,” Hughes explains. We have been able to set up a temporary showroom and warehousing facility that has enabled us to maintain some sense of normalcy throughout the ordeal.”

Ultimately being prepared for a crisis, then reacting quickly and decisively when a loss occurs, is vital to surviving when catastrophe strikes. As Duncanson cautions, “Every day a business is closed from a disaster is an opportunity for a customer to go to a competitor.”

Having dedicated employees is another antidote to disaster.

“We are happy to have a team of people dedicated to their jobs…people who go above and beyond every day. Seeing everyone pull together during this natural disaster was a true testament to their commitment,” Hughes concludes.



Business continuity basics

Want to create a business continuity plan but don’t know where to start? The Open for Business® Basic guide from the Insurance Institute for Business & Home Safety (IBHS) includes 13 forms that provide small and mid-sized businesses with the basics needed to create a customized business continuity plan. To download a free copy, visit


According to IBHS, every emergency preparedness plan should include four elements:

• Pre-disaster actions to protect people, facilities and contents.

• Emergency evacuation procedures and assignments.

• Essential facility operations (or shut down) procedures.

• Off-site storage (back-up) of information.



Identify your risks!

Just because you don’t live in Hurricane Alley, a wildfire zone or floodplains doesn’t mean your company is disaster-proof. As the Insurance Institute for Business & Home Safety (IBHS) notes, natural hazards that could significantly damage or even destroy your business exist no matter your location.

To help you identify and prepare for possible problems, IBHS offers an online “Knowing Your Risks” tool that lets you enter your zip code to obtain a list of the natural hazards that may affect your area. In addition to natural hazards, it also covers man-made risks such as interior water-related losses.



A disaster preparedness checklist

The Insurance Institute for Business & Home Safety (IBHS) offered businesses the following checklist before Hurricane Irene hit the East Coast. The steps listed below can also be a guide to help you prepare for other weather-related disasters.

1.Take pictures of your property/office.

2.Get updated contact information from all employees. Find out where your employees plan on going if evacuated.

3. Know where you will temporarily be located if unable to return to your place of business and how you will communicate the relocation to employees, customers and vendors.

4. Have a plan in place to communicate with your customers.

5. Have your key vendors’ contact information and if time allows, find out their plans to continue servicing you during and after the hurricane.

6. Have a battery-operated radio and spare batteries to ensure you can receive emergency information.

7. Obtain enough flashlights and other battery-powered lights to do essential work if a power outage occurs.

8. Decide what critical items that must be removed from your business.

9. Identify essential business records that should be removed from the property and determine where you plan to take them. Check your backup process to make sure everything is backed up correctly. Protect the backup copy along with your other essential records.

10. With possible power loss, unplug non-crucial electrical equipment being left behind to avoid shock and surges when power is restored. Move them to a well-protected interior room on floors above the level of potential flooding.

11. Fill vehicle fuel tanks. Fuel may not be available during hurricane evacuation activities.

12. Identify outside equipment and furnishings which could blow loose and cause damage.

13. Ensure that backup personnel know how to turn off electrical power, water, gas and other utility services within your building at main switches.

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