If Disaster Strikes, Will Your Company Survive?


The wildfires across the West earlier in the year should be a reality check for businesses all over America. They underscore the need for appropriate insurance coverage and limits, and for having a basic disaster recovery plan.

In the event your office lost power or was totally destroyed during a wildfire, hurricane, tornado or other type of natural disaster, how prepared would you be? Have you identified alternative premises to set up operations? Would your employees know who to call or where to go?

Disaster recovery is a risk control technique. Risk control is anything you can do to lower the frequency and severity of a claim. Disaster recovery won’t reduce frequency, but it will definitely reduce severity. In some cases, an effective disaster recovery plan, supported by a correctly written insurance program, can be the difference between a business’ survival or failure.

According to the forecasting firm Eqecat, Superstorm Sandy in October 2012 was the second most expensive storm in U.S. history. At least 286 people in seven countries were killed along the path of the storm, including more than 125 in the United States alone. The estimated economic damage was more than $68 billion, and 8.5 million businesses and residences lost power. Though many companies were unharmed during Hurricane Sandy, their employees could not, or would not, return to work for various reasons.

Below are some thoughts and lessons learned from Hurricane Sandy on how to better prepare your workforce for disaster so they can return to work in a timely manner:
In every crisis, from large to small, communication is the key to recovering quickly. When planning, communications should be a top priority. Below are some suggestions that might allow you to better develop your crisis communications plan:
It seems like, sometimes, the smallest detail can have the greatest effect on your ability to recover during a crisis. Here are a few tips:
There are companies that specialize in helping businesses create disaster recovery programs. Regardless of whether you use a specialty vendor to help build your plan or elect to devise one yourself, the key is having a plan. Many businesses never recover from a disaster; would yours survive?

Jeff Cavignac, CPCU, ARM, RPLU, is president and principal of Cavignac & Associates, and Patrick Casinelli, RHU, REBC, CHRS, and Jim Schabarum, CPCU, AFSB, are principals of the firm. Cavignac & Associates is a leading commercial insurance brokerage firm providing a broad range of insurance and expertise to design and construction firms, law firms, real estate-related entities, manufacturing companies and the general business community. The firm employs a staff of 40 at its office headquarters located at 450 B Street, Suite 1800, San Diego, California 92101. More information about the company can be found on the Web at www.cavignac.com.

Associated General Contractors of America