Emergency preparedness for business: how insurance helps

Small business owners need to be prepared for any emergency. For example, if a business gets flooded, there could be damage to inventory, loss of customer information (i.e., damage to computer systems) and the business may have to close operations. This scenario can create financial losses for the business owner, which is where insurance can help. In addition to insurance, business owners can prepare for an emergency by conducting an emergency preparedness assessment and reviewing current insurance and emergency plans.

Start with the right insurance

Proper insurance coverage, customized for the business’ needs, acts as the foundation to any emergency response plan. It helps business owners plan for the unexpected, such as replacement costs for damaged equipment. BrokerLink commercial insurance brokers specialize in helping businesses find insurance which will help prepare for the unexpected.

Coverages business owners can consider include:

Business interruption insurance

Emergencies which disrupt business operations will result in lost revenue – business interruption insurance can provide coverage in these cases. Business interruption insurance can also help with additional expenses, such as employee wages, if the business ceases operating from an emergency incident.

Equipment breakdown insurance

Many businesses rely on specialized equipment, computers, phones or photocopiers for their operations. Equipment breakdown insurance can cover the cost of equipment which unexpectedly fails due to:

• mechanical issues (i.e., air conditioners and motors)
• electrical failure (i.e., computers, telephones and photocopiers)
• ruptures of pressure vessels (i.e., hot water tanks, boilers and compressors)

This coverage will help protect a business beyond basic business insurance coverage and can help lessen the impact of financial losses from equipment-related emergencies.

Do an emergency preparedness assessment

An emergency preparedness assessment allows business owners to determine how ready the business and organization is to respond to an emergency. An emergency preparedness assessment often involves risk management, business continuity and workplace safety plans.

Risk management plan

Risk management planning is the process of identifying potential emergencies before they occur. Risk management is an important standalone topic, but also crucial for ensuring an organization can properly prepare for emergencies.

By identifying risks to a business, its operations or its employees, business owners can determine the best way to mitigate those risks.

Business continuity plan

Business continuity plans outline immediate actions which need to be taken following an emergency by assigning certain tasks, such as contacting customers, to specific employees. Additionally, business continuity plans can help organizations transition from the post-emergency response to normal operations.

To create a business continuity plan, business owners can ask a series of questions and catalogue the answers to form the basis of the plan:

• What backup systems are in place? Phone, email, business records?
• How will employees be notified of the emergency?
• How and who will contact customers?
• Is there a complete record of contact information for insurance providers, suppliers and other business partners?
• Is there an alternative site or office to meet in the event of an emergency?
• Where will the plan be kept and who has access to it?

These questions can help business owners begin to formulate a business continuity plan. The Government of Canada has created an extensive guide for creating a business continuity plan which can be used for more guidance.

Workplace safety plan

Part of being prepared for an emergency includes keeping the workplace safe for employees and customers. Having a well thought-out workplace safety plan will help prevent avoidable emergencies which could potentially interrupt operations, injure employees or result in an insurance claim. Workplace safety is a team effort involving business owners and employees and our guide is a good place to start building a plan.

Review and update insurance and emergency plans

It is important for business owners to regularly review their insurance coverage with a BrokerLink broker. By conducting regular reviews, the broker can update insurance coverage to reflect changes to business operations, property or equipment.

In addition to reviewing insurance, reviewing emergency procedures can help business owners identify updates to existing procedures or new procedures which are needed.

Be prepared for the unexpected by contacting one of our locations. Our brokers advise business owners on how they can use insurance to protect their operations and livelihood.