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What Are The Costs if Your Business is Impacted by a Disaster?

How quickly your business can return to full operations after a major disaster such as a tornado, a fire, or a flood often depends on emergency planning you do today!

When you also consider that the number of declared major disasters more than doubled compared to the previous decade, preparedness becomes an even more critical issue. Although each situation is unique, any organization can be better prepared if it

  • plans carefully,
  • puts emergency procedures in place, and
  • practices for emergencies of all kinds.

America's businesses form the backbone of the nation's economy; small businesses alone account for more than 99% of all companies with employees, employ 50% of all private sector workers and provide nearly 45% of the nation's payroll1. Planning today will help support employees, customers, the community, the local economy and even the country. It also protects your business investment and gives your company a better chance for survival.

Ready Business  outlines commonsense measures business owners and managers can take to start getting ready. The site is an excellent resource with easy-to-use templates to help you plan for your company's future. These recommendations reflect the Emergency Preparedness and Business Continuity Standard (NFPA 1600) developed by the National Fire Protection Association and endorsed by the American National Standards Institute and the Department of Homeland Security.

Business continuity and crisis management can be complex depending on the particular industry, size and scope of your business. However, putting a disaster protection and continuity plan in motion helps improves the likelihood that your company will survive and recover.


The following information is a good start for small- to mid-sized businesses. The following helps give you an idea of what it may cost to develop a disaster protection and business continuity plan. Some of what is recommended can be done at little or no cost. Use this list to get started and then consider what else you can do to help protect your people and prepare your business.

No Cost

  • Meet with your insurance provider to review current coverage.
  • Create procedures to quickly evacuate. Practice the plans.
  • Talk to your people about the company's disaster plans. Two-way communication is central before, during and after a disaster.
  • Create an emergency contact list including employee emergency contact information.
  • Create a list of critical business contractors and others whom you will use in an emergency.
  • Know what kinds of emergencies might affect your company both internally and externally.
  • Decide in advance what you will do if your building is unusable.
  • Create a list of inventory and equipment, including computer hardware, software and peripherals, for insurance purposes.
  • Talk to utility service providers about potential alternatives and identify back-up options.
  • Promote family and individual preparedness among your co-workers. Include emergency preparedness information during staff meetings, in newsletters, on company intranet, periodic employee emails and other internal communications tools.

Under $500

  • Buy a fire extinguisher and install smoke alarm.
  • Decide which emergency supplies the company can feasibly provide, if any, and talk to your co-workers about what supplies individuals might want to consider keeping in a personal and portable supply kit.
  • Set up a telephone call tree, password-protected page on the company website, email alert or call-in voice recording to communicate with employees in an emergency.
  • Provide first aid and CPR training to key co-workers.
  • Use and keep up-to-date computer anti-virus software and firewalls.
  • Attach equipment and cabinets to walls or other stable equipment. Place heavy or breakable objects on low shelves.
  • Elevate valuable inventory and electric machinery off the floor in case of flooding.
  • If applicable, make sure your building's HVAC system is working properly and well-maintained.
  • Back up your records and critical data. Keep a copy offsite.

More than $500

  • Consider additional insurance such as business interruption, flood or earthquake insurance.
  • Purchase, install and pre-wire a generator to the building's essential electrical circuits. Provide for other utility alternatives and back-up options.
  • Install automatic sprinkler systems, fire hoses and fire-resistant doors and walls.
  • Make sure your building meets standards and codes. Consider a professional engineer to evaluate the wind, fire or seismic resistance of your building.
  • Consider consulting with a security professional to evaluate and/or create your disaster preparedness and business continuity plan.
  • Upgrade your building's HVAC system to secure outdoor air intakes and increase air filter efficiency.
  • Send safety and key emergency response employees to trainings or conferences.
  • Provide a large group of employees with first aid and CPR training.

  1. Source: U.S. Census Bureau, SUSB, CPS; International Trade Administration; Bureau of Labor Statistics, BED; Advocacy-funded research, Small Business GDP: Update 2002-2010, www.sba.gov/advocacy/7540/42371