Is Your Business Earthquake Safe?

Wellington and the upper South Island recently experienced an unprecedented earthquake, causing serious disruption to life in the CBD. Many businesses are still displaced from their premises, and others are facing a huge cleanup to get their businesses back on track.

There are lessons that we can learn, and must learn, from this tragedy. Let’s arm ourselves with knowledge and move forward knowing that should disaster strike again, no matter how or where, businesses throughout New Zealand will be ready to ride the storm.

Before you formulate your plan, you need to ask yourself the following questions:

• How long can your business afford to be down?
• What is the impact of your business being down?
• How much data can you afford to lose?

Once you have a good handle on the answers to these questions, you will be able to look at formulating your plan. We have identified a number of essential areas that we think you should consider:

Data and Systems

In the event of a disaster, your business premises and/or your server may be damaged or destroyed. Therefore, know your systems, and know which are most crucial to your business, so that you can ensure that you have access to those systems by way of an offsite backup.

Business Interruption Insurance

Business Interruption Insurance will be a business saver. It will allow you to meet your loan, wage and tax obligations, as well as reimbursing you for lost profits. Business Interruption Insurance should be purchased for a stated period of time. The indemnity period is triggered by damage from an event, and will continue for the chosen period. Note, for some businesses in the Christchurch Red Zone, 1 year of insurance cover was not enough, so it always pays to consider the extent of risk you want to be insured for!

Cashflow

Even if you do have Business Interruption Insurance, you are not likely to be paid out immediately so it is recommended that you have a sufficient amount of working capital set aside to pay wages, creditors, and running expenses for a reasonable period after the event. A good relationship with you bank manager wouldn’t go astray in these circumstances either!

Communication Channels

Make sure that you have the contact details for your customers and suppliers available to you. They will also need to know how to get in touch with you.

Stock Protection

If your business holds stock, then try to ensure that you hold minimum levels of stock at all times. It might help to hold additional stock at a secondary location from your business premises.

Staff Contact List

Make sure that your staff contact list and details are up to date. Communication between you and your staff will be essential over the days immediately following a disaster. You may choose to use your website to keep staff informed of developments.

Responsibilities

Who is going to do what? Every plan, whether for a small or a large business, should identify those who are responsible for managing its various components.

Free Workshop

WREMO is offering free Business Continuity Planning workshops to help you be better prepared. Sign up here!