Courtesy of Jewelers Mutual Insurance Co.
When a hurricane or other natural disaster is imminent, many questions are swirling in the mind of a business owner. Should I evacuate or stay put? What about my employees? Should I stay open or close shop? What do I do if my business gets hit?
When Mother Nature strikes, you may have little or no time to grab belongings and evacuate to safety. That’s why there’s no time like the present to prepare for a disaster, evaluate the effectiveness of your store disaster recovery plan, and review your insurance coverage with your agent or broker.
Your first priority should be to keep you and your team safe. To protect your business’ greatest asset—your team—include team members in your disaster recovery planning. Make sure each team member knows his or her role in executing your plan when a disaster is declared.
Planning prior to a disaster for disaster recovery and business continuity provides you and your team with the appropriate steps to take to help mitigate further damage or loss and to restore operations as quickly as possible. Remember to review and revise your disaster recovery and/or business continuity plan with your team at least annually, more often if necessary.
Effective communication in times of company crisis is essential. Establish a calling-tree plan that provides quick access to associates’ and key vendors’ phone numbers. Also be sure your team has direct access to the calling tree so that they can remain as informed as possible, especially following an event. Before a disaster strikes, be sure to assign critical communication roles to your associates to keep your entire team informed before, during, and even after an event so that everyone can execute their assigned roles in your disaster recovery plan.
Create, maintain, and protect easily accessible inventory control records for your merchandise, other people’s goods, materials for manufacturing, and your business personal property. A sound strategy for any effective disaster recovery plan is to make sure you can quickly substantiate your covered claims to expedite your insurance settlement. Keeping a copy of this up-to-date information protected at an alternate off-site location is one of the smartest things a prepared business owner can do.
Your inventory records should include a detailed listing of all owned raw materials, stones, parts, samples, finished goods, and merchandise from the time you receive them until they’re sold. Create a document containing the following:
Descriptions of raw materials, parts, samples, finished goods, and merchandise with enough information that you can trace an item to its original source document, such as a purchase invoice.
Exact values of raw materials, parts, samples, finished goods, and merchandise, rather than rounded values. Don’t forget to include jewelry lines carried by salespeople; they must also be counted in the annual inventory.
Dates chronicling the day on which inventory was received and the day on which raw materials or parts were used. Update these records daily to include notes on the quantity of inventory items used.
Inventory numbers that are added at a consistent point in your manufacturing or design process so you can track raw materials as they become finished goods.
If you have time to do it safely, you may want to lease a bank safe-deposit box when you are in the path of a hurricane or are at risk for flooding. Get a box located at the highest elevation off the floor. Place high-valued property in individually sealed plastic bags in the safe-deposit box. Secure as many materials and finished goods as you can inside your safe(s) or vault(s). Items that cannot be secured in the bank safe-deposit box or in your safe(s) or vault(s) should be secured in a locked room inside your protected premises. If this is part of your disaster-preparedness plan, make sure you have insurance coverage for property stored in a safe-deposit box.
To help facilitate timely claims, supplement your inventory control records by taking photos and a video of your business personal property, supplies, and finished goods to document any damages and losses.
Even when you create and maintain excellent inventory control records, remember that they’re only helpful if you can easily access them. Do not rely solely on paper documentation that could be ruined in a flood or vanish in a fire or tornado. And don’t rely solely on one computer as a backup to your records either. Create and maintain an external hard drive, flash memory, or cloud service for backing up inventory control records, and store these in an off-site and secure location.
Mother Nature can unleash some powerful events that may damage your building, but the routine maintenance and repairs you conduct can certainly help you maintain a safe and secure property. Simple actions like placing business personal property up off the floor in the wake of a flood warning can be effective risk management to help mitigate a loss.
When preparing your off-site business information, remember to include the names and contact information of your preferred vendors, including glass repair and restoration services, to help speed your recovery.
Can you ever be too prepared when natural disaster conditions are brewing? When preparing for the worst, consider keeping the following recommended items at your business property and home:
• Battery-powered radio
• Camera and film for documenting property before and after
• Contact lists, including those for employees, vendors, and official emergency centers
• Emergency communications equipment
• Extra batteries
• Fire-protection equipment
• First-aid kit
• Fully charged cell phone
• Generators or other means of emergency power (test periodically)
Most important when preparing for recovery, make sure you understand what insurance coverage and limits you have in force and what you will need to do in the event of a covered loss. Talk with your agent or broker for help making informed decisions with regard to your current insurance coverage and limits as well as a how best to risk-manage exposure to potential loss for which there is no insurance coverage. If you are leasing property, understand your tenant responsibilities and be prepared to meet these as part of your planning. When it comes to business continuity preparedness, failure to plan is indeed planning to fail!
For more disaster preparedness tips, visit JewelersMutual.com/Disaster.
MJSA exclusively endorses Jewelers Mutual Insurance Company’s commercial and personal jewelry insurance products. To learn more about Jewelers Mutual’s coverages and to find an experienced insurance agent in your area, contact Jewelers Mutual at 1-800-558-6411 or e-mail YourInsuranceExpert@jminsure.com.