Insurers across the world have been paying out vast amounts of money in compensation for the disasters that have impacted business. However, if there is no system to ensure a business survives there is a strong risk that they’ll go down the plughole.

One major issue is not having evidence of outstanding invoices. Without the paperwork you won’t be able to collect the money you’re due.

Another is trying to get new broadband and phones installed. Have you any idea how long your supplier is going to take to install your links and those of anyone else who’s been affected? And who gets worked on first? You guessed it, the large companies who spend the most with that telecoms company?

And then again, even more fundamental - where do you relocate your shop, hotel, office or manufacturing plant?

These are questions that should be asked before any disaster. That gives you the opportunity to continue trading and maybe take the business from others who go to the wall who weren’t prepared.

One other thought…

Don’t think it can’t happen to you. Everyone who lost their business because they weren’t prepared felt that way!

Floods Recovery Minister John Healey after meeting the Association of British Insurers regarding the floods in 2007, said

"It was a very useful meeting where the ABI said that out of a total of at least 130,000 claims, by the end of August one in five of household claims had been settled and 10 per cent of business claims. While awaiting updated figures they expect this now to have reached around 25 per cent of households and 15 per cent for businesses".

The quote was taken from a government web site.

The Minister is also quoted as saying, ""Over the last few months there have been a number of reports in the media about areas being blacklisted for flood related insurance cover and insurance renewals refused. The ABI today confirmed to us that no areas have been blacklisted, existing cover has not been withdrawn in any area and there is no evidence that policy renewals are being refused. I hope this will give households and businesses reassurance in the face of such reports. The Government will continue to work with the industry to ensure this remains the case."

I suspect this worry in the media is related to a passage on the Department for Environment, Food and Rural Affairs (Defra)  website where it says:

"Flood cover will be available as a standard feature of household and small business policies for a) those properties defended to a minimum standard of 1 in 75 (in other words where the design standard of defences is such that the probability of the properties being flooded in any single year is 1.3% or less), or b) for those properties where such defences are scheduled for completion within the next five years. Premiums will continue to reflect different degrees of risk."

Which to my way of thinking means that if you’re at risk of flooding 1 in every 60 years you’ll be refused cover.

In which case you most certainly need to have a proper recovery plan for your business or you’ll sink without trace!

A recent survey by the Chartered Management Institute reported that in 2007 about 1 in 3 businesses had business disruptions, due to loss of their IT (39%) or of their people (32%).

Those affected by extreme weather rose from 9% in 2006 to 28% in 2007.

The other categories of disruption were:

• Extreme weather e.g. flood/high winds
• Loss of telecommunications
• Utility outage e.g. electricity, gas, water, sewage
• Loss of key skills
• Negative publicity/coverage
• Employee health and safety incident
• Supply chain disruption
• Loss of access to site
• Damage to corporate image/reputation/brand
• Pressure group protest
• Industrial action
• Environmental incident
• Customer health/product safety issue/incident
• Fire
• Terrorist damage

As you can see business disruption is not only from weather, flood, fire or bomb.

A large part of the ability to keep your business going is down to using a written process to carry out business functions so that if necessary someone else could do the process.

In a similar way identify what you would do if your computer systems were unavailable.

Certain types of business are more at risk from flooding than others.

Historically retailers have always been located where communications meet. As well as roads that also often means rivers and fords across rivers. Which also means there are a large number of retailers located in built up areas, near to rivers. They can have a lot of stock on display on the ground floors. Often extremely effective use is made of the space. Then floods and flood damage can wipe out stock completely. In particular periods of the year when retailers have high stock levels are the riskiest - for example Christmas and New Year Sales.

Warehouses with full stockrooms may be unable to move floor-based stock above the floor, or may only be able to raise it to a pallet level. That means floor-based stock is likely to be a write-off.

Businesses that are heavily reliant on computer technology infrastructure, such as IT companies, are in danger of having their electrical and networking cable destroyed by flood.

Web based businesses are also at risk if the server farm where there business is based has a flood as they are unlikely to know about it unless their web site goes down. 

Free Disaster Prevention Tips

Fire, flood, storm or terrorist attack – you can rarely predict whether you’ll be affected by them.

CashFlow Disaster

However, think of how devastating it would be if you were unable to collect money owed to your company because your invoices were all destroyed. How many companies could you chase for payment if you had no proof? What would that do to your cashflow and you ability to make payroll and pay your own suppliers, who still have their paperwork?

Telecoms Connection Disaster

What about the 6 weeks delay in connecting phones at different or temporary premises?  Obviously you can use mobiles and then what about their costs, and the loss of prospects who are phoning the number they have for you and get the unobtainable tone.

What about your connection to the Internet for everything we rely on: getting new supplies of paper, ink and other consumables, chatting to prospects and clients through email and Chat tools?

Insurance Won’t Payout

It’s great you’ve got insurance, without the right insurance you’ll have your claim knocked back. If you can’t estimate precisely, with some proof, your level of stock, your fixed assets (like your computers) or your furniture you’ll only get part of your claim. And by the way don’t expect your claim to be settled within a few days if there’s any question with it. A lot of disaster claims can take months to get through.

You Can Go Out Of Business

You can usually predict that many businesses will go to the wall. Think of the small businesses in Royal Exchange in Manchester after the IRA bomb there. How many are still trading? What about the businesses that were trading in Hemel Hempstead when the Buncefield Oil depot exploded into a huge fire. How many do you think managed to survive that?

Could your business cope with being excluded from your building? Because when there’s a major disaster travel into the disaster area, even to unaffected buildings can be limited for weeks.

So what can you do so you can avoid these sorts of nightmares? Check out "Prepare For Disaster", in the next section.

Prepare For Disaster

There are many things that can really help your company pull back from the brink of disaster, even if a natural disaster has devastated your premises. For example do you know which route the emergency services will use to get to your area? Trying to use that route to escape from a  disaster is a recipe for going nowhere fast.

Email Bombox at 47tips AT Bomboxuk dot co.uk today to get your FREE copy of 47 tips to reduce any disaster’s impact on you and your business.

Don’t delay because another day could mean you’re one step closer to a disaster.

East London businesses in industrial estate Queen’s Yard were evacuated today as a derelict warehouse on London’s 2012 Olympic site went up in massive flames and smoke.

And did they know what to do when they were evacuated because of a major fire incident?

Possibly, possibly not.

Here’s a list of things they should have done, keep it near you so if you’re a close neighbour to a major fire incident next time you know exactly what to do.

1. If you’re in close proximity evacuate your customers and staff to a safe location away from the fire or the line of access for the services
2. Close down computers and turn off electrical appliances, un-plug if possible
3. Take a bag with staff contact details
4. Take your phone and its charger
5. Close and secure all windows and doors
6. Place all valuables in safes or other secure places
7. If you think that your premises could be affected by running water under the doors place rolled carpet or towels behind the doors most at risk
8. Take your list of recognised recovery trades people (this may be kept with you insurance policy)
9. Secure your premises as if you were leaving for the night, with your alarm on
10. Secure awning or fabric from shop fronts as this could catch fire from sparks
11. Listen and follow instructions given by the services and do not endanger anyone’s life (including yours) by considering property before people

Just checking those tips will help you get through the major incident. Also recognise that you may be unable to return to your business that day, or even that week. What would you do then…

Also notice how major incidents affect communications - Hackney Wick railway station was closed down and the bus station couldn’t be used because the heat and fire was affecting it. The result is that people are hanging around waiting to get buses, or walking.  If the business had asked the simple question what would happen if we had a major disaster everything a business needed to do could have been worked out.

This is the beginning to disaster preparedness!

Immediate action based on your own plan if you’re in a flood prone areas is vital, those few minutes can save the day for a business and allow it to continue trading. Lack of planning can put you out of business and sometimes you won’t even know for weeks.

1. Use warnings to take action immediately and to co-ordinate items on an urgent to-do list which you’ve hopefully already prepared
2. Move all PC equipment, including printers and routers to the highest point that is feasible
3. Move all paperwork, such as current invoices and orders, up high, or off-site
4. Put all legal and insurance documents place in safe place not at risk from the floods, preferably in a safe place off-site
5. Un-plug all items such as phones and broadband where possible
6. Place items that can’t be moved higher on bricks or solid material
7. Roll-up any loose items such as curtains and carpets and if possible lay them across stacked bricks
8. If you’re staying on the premises prevent water build-up by opening doors on the downward slope. Other wise lock up as usual and sand bag all the entrances, including air bricks.
9. Get updated information by regularly checking the emergency numbers and listening to local radio
10. Make contact with those people important to your business and tell them what is happening.

Not only was I the victim of a double mains burst but also of a blocked mains drain, as you can see from the picture above.

So these types of disaster don’t just happen to those who live next to the coast, on a river bank or in the Norfolk Broads!

The British Insurance Brokers’ Association has a range of insurance-related tips that a business really needs to consider carefully. There are more equally important flood advice tips that I’ll give you in another post shortly.

1. Keep adequate insurance cover
2. Check whether to call your broker or insurer if disaster happens - most have help lines
3. If your property is not maintained properly, including gutters and flat roofs claims may be affected
4. Ensure you’ve the correct "Sums Insured" for your building and contents, otherwise your claim could be reduced
5. Keep pets and garden valuables inside
6. Check you’re getting a competitive excess which you afford to pay if a disaster happens
7. If your property is a high risk from flooding (check the Environment Agency Flood Map) talk to your broker for advice to reduce damage
8. Move as much as upstairs as you can when you hear a flood alert
9. Switch gas and electricity off and keep off until suppliers give the OK
10. Don’t drink the mains water as it may have been contaminated by sewage – keep off until supplier gives OK
11. Keep furniture away from walls to prevent further damage
12. Keep a copy of important telephone numbers and policy documents in a safe, waterproof and easy to find place
13. Call the 24 hour Environment Agency Floodline on 08459881188 for flooding information in your area
14. Get sandbags for doors and consider specialist defences such as air brick covers and window defences

When you see them listed down they seem obvious. However, when you’re under pressure and water is cascading down your street having a plan to execute saves you time and inevitably money too. Having been the victim of a double Manchester ring main burst a few years ago I speak with experience on what needs to be done when such a flood occurs.

Natural disasters are happening all over the world all the time.

Fire, flood, earthquake, volcano. We don’r hear about them all unless thousands are involved.

But what if you were one of 5 offices flooded by a burst river or canal bank?

A disaster if you couldn’t get in to run your business?

Disaster recovery preparedness is the key to implementing a
disaster recovery plan successfully.

And of course one key part of that is the data we all have stored
on computer and in the filing cabinet.

Creating data backups is absolutely vital and yet only one
component of a disaster recovery plan.

The other component is to ask whether you keep the data you’ve
backed up off-site?

Because if you’re hit with a flood or a fire wipes out your
building you’re not going to be able to get in to get your
backups.

And natural disasters such as floods, earthquakes and fires are
no respecter of territory and may also invade your house where
you’ve the most vital backups stored.

In which case the key to recovery is to buy a tough, watertight
box that can take a lot of punishment.

It’s also important that you can see it in the murk as it could
be under water, rubble or in the dark - because the power is off.

The best colour to see in bad conditions is not white as everyone
thinks but yellow. So a strong yellow box is going to stand out
and stand up to punishment.

The other thing to think about is whether you’ve a computer to
restore your data to so that you can get back up and running very
quickly. To reduce the risk you could have a computer at the home
of a key employee ready to run your key systems - such as
accounting and customer relationship and email systems on.

And finally, how do you know the plan will work and demonstrate
your disaster preparedness to your company?

Rehearsal. Yes you need to rehearse the disaster recovery plan
and make sure you really can work from the box on the key
employee’s computer after a disaster.

The current threat level for terrorist incidents is Severe (as at 4th July 2007).

That is the informed opinion as reported by MI5 on their intelligence web pages

The Threat Levels

These levels give an indication of the likelihood of a terrorist attack.

The estimation is based on factors such as recent events, terrorist intentions and known abilities and current intelligence from a variety of sources.

As always such intelligence is usually incomplete, otherwise we could simply walk in and arrest the terrorists just before an incident happens!

And there are 5 levels of threat. These are:

• Critical - an attack is expected imminently
• Severe - an attack is highly likely
• Substantial - an attack is a strong possibility
• Moderate - an attack is possible, but not likely
• Low - an attack is unlikely

And of course certain areas are at higher risk than others. Areas at higher risk include:

• Major train stations such as London, Manchester, Birmingham
• Airports such as Gatwick, Heathrow, Manchester
• Cities London, Manchester, Birmingham

Think about this for a moment. You may not be affected by a bomb, or even an "incident." What happens if the security forces have to seal off the area where your business is for a day, 2 days or more? Would you be able to continue trading with little or no impact?