Product Family

Protecting business from devastating events


The forecast for the 2020 Atlantic hurricane season: between 13 and 19 named storms, including 3 to 6 major hurricanes, a few of which are expected to reach US shores. If your business is in the path of such a storm, it could wipe out all you’ve worked hard to build.

Yet hurricanes are not the only natural disasters that threaten your business. Other, less predictable disasters can strike, as well: flood, earthquake, tornado, and wildfire. Flood waters from Hurricane Katrina in 2005 caused $161 billion in damages and extensive loss of life. The Northridge, Calif. earthquake in 1994 topped $20 billion in losses. The cost of tornados that hit between May 26 and 29, 2019 topped $3.4 billion. And in 2018 alone, over 58,000 fires scorched close to nine million acres in the US, costing $24 billion.

Any one of these natural events could interrupt your business operations or worse, cause permanent closure. That’s because the immediate impact of a natural disaster on businesses is devastating, particularly for small business owners. Nearly 40 percent that close as a result of a storm will not reopen; within two years, 25 percent more businesses will close, and; within three years, 75 percent of businesses without a continuity plan will fail.

Planning for Recovery
A well-constructed natural disaster plan can help your business protect against some of the potential costs. A good plan can help your business:

  • Recover and resume business
  • Reduce liability and exposure
  • Improve safety of facilities and employees
  • Continue full operations in the future

Your emergency plan should address a number of important factors that can help you respond to and recover quickly. Those factors include:

  • Preparation: The controls and steps that should be in place and implemented before a disaster strikes.
  • Response: The procedures and steps your company will take immediately following a natural event.
  • Recovery: The actions your business will take to restore critical functions to get the business up and running.
  • Business continuity: The plan for getting the business fully restored after a natural disaster or interruption in operations.

Being prepared means knowing what makes your business vulnerable and taking steps to lessen those vulnerabilities. Start with an analysis of your facilities. Which natural disasters are your facilities susceptible to? What is the probability of impact? How does your facility’s surroundings – natural, physical, and man-made – increase or decrease the risk of loss? Are you sitting in a flood plain? What hazardous materials are on site or nearby? How close are railroads, roads, or airports? How quickly could emergency services reach your facility? And are their resources adequate to protect your business? Seek information provided by local emergency planning committees, government agencies, and insurance carriers to determine your level of risk.

Inside your facility, identify the critical products, services and operations you need to recover from interruption. They include:

  • Products and services: Which customers will have critical need for what products/services post-disaster?
  • Vendors and suppliers: Where are suppliers located? What is their potential disaster impact, and how will that affect your operations? Are there alternative sources for your raw materials? How long could you operate without re-supplying?
  • Operations and equipment: What equipment must be protected? What onsite materials could create additional hazards in the event of a natural disaster? What equipment must be available after a disaster, and how is it being protected? What preventative steps can you take when a severe event is forecasted?
  • Data storage: What data is essential to your business’s operations? How are you protecting critical company data? Are you storing data in multiple locations?

As you assess your preparedness, note which areas you need to improve in order to be better prepared.

Nearly 40 percent that close as a result of a storm will not reopen; within two years, 25 percent more businesses will close, and; within three years, 75 percent of businesses without a continuity plan will fail.

How you will respond to a natural disaster is a critical part of the planning process. What steps must be done immediately after an event? What actions will be taken in the event of or at the prediction of a natural disaster? Are there utilities or machinery that needs to be checked or turned off/on?

Also, understand how your business will respond during an event. Where is the safety and fire response equipment, and do employees know how to use it? Where are the escape routes, restricted areas, and hazardous materials located? What high-value items need to be stored safely or removed from the premises.

A good response plan should include the following:

  • Who in your organization will coordinate response efforts
  • Who is responsible for what functions during an emergency
  • What local utilities will be impacted and how will you coordinate with them for resumption of service
  • What training do you or your employees need in order to handle your company’s response plan

Particularly with utilities, your plan should include consideration for any backup power sources. Depending on the disaster, your company should analyze how long you can remain operational or inhabit the facility without critical utilities.

After the disaster, your organization needs to get back to business. Planning how you will restart can make that transition go much more smoothly. What actions does your business need to take in order to restore critical functions so that you can resume some of your previous operations?

And recovery will take time. Your business, your community, will need that time in order to regroup, assess damages, make repairs, and get supplies coming in again, if applicable. However, it is still important to restart your operations, even perhaps at a lower level of activity than previously.

Business Continuity
Now that the business is running again, how you move forward could mean the difference between full recovery and eventual business failure. 

The goal of your continuity plan is to restore the business to where it was before the natural disaster struck. Designate a point person who will oversee the creation of the plan, and also the execution of it post-recovery.

For the plan to work, you need a team effort. Your employees are as much a part of your continuity plan as they are part of your operational success. Get their feedback. Ask what they need in order to do their jobs effectively. What items must they have in order to operate during recovery and importantly, as productively as they can going forward?

General Preparedness Measures
While your preparedness plan will vary depending on what natural disaster threats your business is vulnerable to, a few general points apply to nearly any natural disaster situation. When building your emergency preparedness plan, keep in mind the following decisions that need to be made:

  • What the triggering condition is that will activate your plan
  • What the chain of command is in an emergency
  • What emergency functions must be performed, including site and equipment preparation, and who will perform them
  • What your evacuation procedures are, including exits and routes
  • How you will account for employees, customers, and visitors
  • What equipment will be supplied to your employees
  • What shutdown processes need to be followed in the event of an emergency
  • How you will conduct drills for all employees, and how often
  • What provisions must be made for emergency sheltering and associated emergency supplies

Once you have all the elements of your natural disaster plan in place, review it regularly and update it with best practices and lessons learned. Conditions in your business change rapidly. So too should your disaster plan, particularly if your business adds a new product line, changes existing supplies used, increases or decreases premises, or has a neighboring business move in that poses additional exposures.

Prepared for the Future
Staying ahead of natural disasters takes planning. While you may never need to use your disaster preparedness plan, having both the plan and the training behind it can pay off should the unthinkable occur.

Should disaster strike, the health of your business depends on your plan for both recovery and full restoration of operations. Your plan helps you to review and improve on your operations, while at the same time understanding your full exposure and mitigating what you can prior to any natural event. Coordinating with local authorities and agencies, as well as partnering with your insurer, can help with both mitigation and recovery time.

You cannot plan for everything. But by having a flexible plan that addresses the risks your business faces, you can create a better response that gives your business a fighting chance of recovery.

For more detailed information on how to build a natural disaster preparedness plan, read our Natural Disaster Emergency Planning and Preparedness Risk Bulletin.


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Global Asset Protection Services, LLC, and its affiliates (“AXA XL Risk Consulting”) provides risk assessment reports and other loss prevention services, as requested. This document shall not be construed as indicating the existence or availability under any policy of coverage for any particular type of loss or damage. AXA XL Risk. We specifically disclaim any warranty or representation that compliance with any advice or recommendation in any publication will make a facility or operation safe or healthful, or put it in compliance with any standard, code, law, rule or regulation. Save where expressly agreed in writing, AXA XL Risk Consulting and its related and affiliated companies disclaim all liability for loss or damage suffered by any party arising out of or in connection with this publication, including indirect or consequential loss or damage, howsoever arising. Any party who chooses to rely in any way on the contents of this document does so at their own risk.

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