The preparedness program is built on a foundation of management leadership, commitment and financial support. Without management commitment and financial support, it will be difficult to build the program, maintain resources and keep the program up-to-date.
It is important to invest in a preparedness program. The following are good reasons:
- Up to 40% of businesses affected by a natural or human-caused disaster never reopen. (Source: Insurance Information Institute)
- Customers expect delivery of products or services on time. If there is a significant delay, customers may go to a competitor.
- Larger businesses are asking their suppliers about preparedness. They want to be sure that their supply chain is not interrupted. Failure to implement a preparedness program risks losing business to competitors who can demonstrate they have a plan.
- Insurance is only a partial solution. It does not cover all losses and it will not replace customers.
- Many disasters — natural or human-caused — may overwhelm the resources of even the largest public agencies. Or they may not be able to reach every facility in time.
- News travels fast and perceptions often differ from reality. Businesses need to reach out to customers and other stakeholders quickly.
- An Ad Council survey reported that nearly two-thirds (62%) of respondents said they do not have an emergency plan in place for their business.
- According to the Small Business Administration, small businesses:
- Represent 99.7% of all employer firms
- Employ about half of all private sector employees
- Have generated 65% of net new jobs over the past 17 years
- Made up 97.5% of all identified exporters.
How much should be invested in a preparedness program depends upon many factors. Regulations establish minimum requirements and beyond these minimums each business needs to determine how much risk it can tolerate. Many risks cannot be insured, so a preparedness program may be the only means of managing those risks. Some risks can be reduced by investing in loss prevention programs, protection systems and equipment. An understanding of the likelihood and severity of risk and the costs to reduce risk is needed to make decisions.
A preparedness policy that is consistent with the mission and vision of the business should be written and disseminated by management. The policy should define roles and responsibilities. It should authorize selected employees to develop the program and keep it current. The policy should also define the goals and objectives of the program. Typical goals of the preparedness program include:
- Protect the safety of employees, visitors, contractors and others at risk from hazards at the facility. Plan for persons with disabilities and functional needs.
- Maintain customer service by minimizing interruptions or disruptions of business operations
- Protect facilities, physical assets and electronic information
- Prevent environmental contamination
- Protect the organization’s brand, image and reputation
Program Committee and Program Coordinator
Key employees should be organized as a program committee that will assist in the development, implementation and maintenance of the preparedness program. A program coordinator should be appointed to lead the committee and guide the development of the program and communicate essential aspects of the plan to all employees so they can participate in the preparedness effort.
The preparedness program should be reviewed periodically to ensure it meets the current needs of the business. Keep records on file for easy access. Lastly, where applicable, make note of any laws, regulations and other requirements that may have changed.
Source: FEMA, “Program Management.” http://www.ready.gov website. Accessed February 2, 2017. http://www.ready.gov/program-management
© Copyright 2017. All rights reserved. This content is strictly for informational purposes and although experts have prepared it, the reader should not substitute this information for professional insurance advice. If you have any questions, please consult your insurance professional before acting on any information presented. Read more.
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