Last year, worldwide insurance andreinsurance losses related to the five major hurricanes that hit the U.S. wereestimated at $57.6 billion, according to Advisen Ltd. For any tire dealershipto survive disasters like these, it must have a recovery plan.
If you don’t already have acontingency plan built into your business operations, now is a good time tocreate one. June 1 marks the beginning of hurricane season in the Atlantic.
“The overall goal of a disasterrecovery plan is to return your business to normal operations as quickly aspossible,” says Jeff Lubberts, director of major loss, at Universal
Underwriters Insurance Co. “Arecovery plan helps businesses maintain cash flow, protect employees, keepcustomer relations positive and retain the client base. While propertyinsurance will repair or replace facilities, interruptions in businessoperations can cause lost customers, employees and vendors.”
With severe weather season uponus, it is time for all independent businesses to review their insurancepolicies and ensure they have the proper coverages in place.
“During last year’s Gulf storms,many homes and businesses were affected by flood damage,” said Lubberts. “Thetragic part of this storm damage is that many of these businesses and homes didnot have flood insurance, and all or much of their loss was not covered.” Whilereviewing their insurance policies, Lubberts encourages businesses to take intoaccount even those events they see as low to medium risk.
After reviewing all insurancepolicies, a tire dealer can create a disaster recovery plan by following thesesteps:
• Identify disaster exposures.Disasters can be natural, man made and political. Identify any potentialhazards, such as fire, flood, tornados and the loss of an important supplier.
• Identify critical personnel,equipment and data. “Critical” refers to any employee, piece of equipment ordata a business needs to function. Evaluate all aspects of your business todetermine what elements must be in place to return to normalcy quickly.
• Collect information. Create alist of every piece of information important to your business. This list shouldinclude inventories, telephone numbers, equipment listings, vendor lists,software inventory and other important items. It should be stored in a securelocation, accessible from outside the building.
• Develop a formal writtendisaster recovery plan. All of the above information should be incorporatedinto a plan that identifies specific disaster scenarios, steps that willprotect a business prior to the disaster and instructions for gettingoperations back to normal as quickly and efficiently as possible.
• Test the plan. Test the planinitially to ensure it has accounted for everything necessary in a disaster.Review and update the plan annually and as exposures to loss change.
Tire dealers don’t have to createdisaster recovery plans alone. Universal Underwriters, for example, will workwith customers to ensure their plans are effective.
The company also recommends thefollowing resources:
• Institute for Business and HomeSafety (www.ibhs.org)
• Disaster Recovery Journal(www.drj.com)
• American Red Cross(www.redcross.org)
• National Emergency ManagementAssociation (www.nemaweb.org)
For more information on creating adisaster recovery plan, go to www.universalunderwriters.com, click on onlineresources, and access the Loss Prevention Library.
