Apr 24, 2019 | Events
Preparing for disaster includes preparing for what follows when your employees and community most need you to be open for business.
Disasters can strike businesses at any time and take almost any shape: A flood takes out a startup’s servers. A founder is imprisoned. A tornado destroys the office building. Whether it’s a natural disaster, a PR scandal or something else altogether, not being ready can add another level of devastation to an entrepreneur’s life.
I know this firsthand. My company, ONTRAPORT, endured the Santa Barbara fires and aftermath that started in late 2017 and ravaged into this year. We also had shifts on our accounting team that resulted in me trying my hand at accounting (not my forte). Needless to say, 2018 has been a year of unexpected change and destruction — both of my team’s physical surroundings and our “usual” way of doing things.
Alongside our CEO, Landon Ray, I debated: “What do we do as leaders of this company and leaders in our community?” It all boiled down to a question that wasn’t so simple to answer: What kind of emergency preparedness should you have in place so when stuff hits the fan, you’re ready to execute?
Stuff hits the fan
The fires and mudslide in Santa Barbara were crazy acts of nature that resulted in evacuations as people’s health was put at risk with the toxic air. Twenty-three people died in what’s been called “the worst disaster in Santa Barbara history.” It was a scary and traumatic experience as people were spread out, unsure of the status of people they cared about.
Before we knew how bad things were going to get, we still knew that the only way to keep our company up and running was by being proactive. We’d created an emergency plan years ago, so when the fires started, I immediately pulled the plan out at 6 a.m. because I had already lost power at my house and knew we were going to lose power in the office. We weren’t in the evacuation area yet, but we needed a generator before they sold out.
We made sure to buy the right masks for everyone after we researched how to stay safe with declining air quality. Unlike most homes in Santa Barbara, our office had air conditioning, so we ordered HEPA filters. And when we realized that wasn’t going to be enough because the air quality had become hazardous, we rented a ranch in Los Osos, two hours away. At that point, we evacuated and couldn’t return to the office. We told people to work where they could — about half came to the ranch, while the rest went to other areas with their families and loved ones.
When safe places no longer feel safe.
We heard stories from others in the area that their employers wouldn’t pay them because they couldn’t work. I get that this was an emergency, and business owners have to make business decisions. We also had some employees who couldn’t work: Our coffee and meal program employee couldn’t take care of people’s food because they weren’t in the office.
In the same vein, our childcare center wasn’t taking care of people’s kids, but we knew that, just like our meal program provider, we had to pay them so they could in turn pay rent. Those are the decisions you have to make as an employer; they go a long way toward building trust with people. Treating people well isn’t just a short-term investment but a long-term one, too. We wanted people to feel really taken care of.
And that applied to the employees who could still work as well. We set the ranch up with Wi-Fi, VPN, laptops and docking stations. We tried to close every loophole that could prevent us from offering customer support, prevent our marketing team from implementing campaigns or stop our engineers from fixing bugs or working on the development of new features on schedule.
How to prevent a disaster from getting bigger
Not every employer can move things around the way we did — but a lot of entrepreneurs can do better than they’re currently planned for. It’s all about remaining thoughtful in how you handle the disaster facing you, and there are some smart ways to do that.
1. Make your priorities known.
The only thing more demoralizing for employees who are going through a situation of disastrous proportions is feeling as if they’re means to an end. Servers, process documents and computers can all be replaced; people can’t be. Make it clear that their safety is the most important thing.
We sent daily morning and evening emails or messages through our ONTRApeeps social media community to keep everyone connected and make sure people were safe. Every day, we also sent updates on the fire situation based on the information we were receiving so our team knew we were staying informed on a situation that directly impacted their lives and livelihood.
2. Plan ahead to stay open.
While some businesses are built to be hands-on entities — say, massage therapy or tutoring services — most entrepreneurs can make plans to keep working when disaster strikes. We proactively placed our servers for customer work in different locations so customers wouldn’t see disruptions, and we created redundancy with Amazon and Google Web Services. Creating tech stopgaps can save your business.
3. Look at what your state provides.
Our state had disaster recovery funds, and employees who didn’t get paid could apply for unemployment during that time. Knowing what state benefits are available can be life-saving for both your business and your employees. Go the extra step to prepare the paperwork for affected employees so they can simply submit it if they’d like to access the benefits. Be informed ahead of time.
4. Always have three people who know how to do a job.
Not every entrepreneur has three employees. However, every entrepreneur can ensure processes are documented so anyone can follow them. When we ran into issues on the accounting side, many employees asked if they could help, but because some processes weren’t documented, we couldn’t take them up on their offers. Enforce documentation updates — if you don’t, you’ll be the one cleaning up the debris.
5. Do what you can to help.
Our company did Valentine’s Day candy grams as a fundraiser for affected families, raising several hundred dollars through people buying handmade cards from our HR team. We went together to dig out houses and hosted a bucket brigade of 300 people at our office to show our support. We couldn’t afford to provide housing or write huge checks, but we did what we could.
No one is immune from disaster, but everyone can prepare for disasters so their impact is limited. Entrepreneurs have a lot to lose when disaster strikes, and not being ready ensures that the devastation takes on new proportions. Planning ahead for the inevitable will save not just your sanity, but also your company.
Source: Entrepreneur
Author: Lena Requist
Oct 24, 2018 | Loss Control
An often overlooked part of the massive losses suffered by businesses, academic institutions, and other organizations as a result of fires, floods, and other severe weather is the damage to critical records and documents. By not protecting and ensuring these documents, organizations can face significant business continuity losses and compromised client services. There are several important steps that prudent risk managers can take to ensure that their critical documents are managed properly and protected as much as possible from a potentially damaging event.
1. Understand Document Retention Requirements and Dispose of Unnecessary Documents
Document retention requirements are determined by city, state and federal regulations, and can vary by document type. A general rule of thumb is that financial records should be kept for seven years. Health records for children must be retained for 25 years. Deeds and loan documents must be kept permanently. Establishing a consistent base volume of stored records and documents can help determine the necessary level of insurance coverage. The longer the retention period, the greater the risk so purging those documents that are not necessary to retain can reduce the risk that damage will occur.
2. Assess Document Exposure
Determining the level of document exposure depends on the answers to several questions. First and foremost, what is the volume of critical documents? The more documents stored, the greater the cost to insure them. The more densely they are stored, the greater the localized risk.
What type of recovery service is necessary? This answer will vary from business to business. If original documents are required, they will likely be returned after drying and cleaning with visible signs of damage, such as stains and bleeding of ink. This may be fine for archived files but may cause problems for businesses such as medical facilities, law and accounting firms, and their clients. In another instance, a mortgage title company may likely want a drying, sterilization and cleaning option even when their documents are affected by Category III water (highly contaminated water such as sewage or floodwaters, also known as blackwater). Faced with the same dilemma, a medical facility is likely to prefer reproduction or imaging.
Is immediate access to documents important in the wake of a calamitous event? This will determine which of the two basic techniques for document drying is most appropriate. Vacuum freeze drying provides the best results for books and clay-coated paper. However, capacity is limited by the size of the drying chambers and backlogs can quickly develop if a document recovery specialist relies solely on this method. Desiccant drying effectively processes large quantities of documents, but causes wrinkling and requires trained technicians to avoid secondary damage to documents during the recovery process.
The information gleaned from the answers to these questions can be extremely useful in determining the potential cost of document and record restoration. However, there is no standard formula or computer model to generate cost estimates. Instead, the number of documents required for retention and the qualitative requirements of that retention is used to develop a hypothetical, industry-average cost estimate for a worst-case scenario loss.
It is important to remember, however, that any assessment of this kind cannot determine the cost of a total loss. Establishing the cost of drying 100 boxes of documents submerged in water for two days is doable. Understanding the cost of recovering those 100 boxes after they have been burned to ash is not.
3. Ensure Adequate Insurance Coverage
The cost of insurance is typically determined by the cubic feet of stored documents and records to be covered. A range of $100 to $1,000 per cubic foot can provide a general low-to-high estimate of coverage needed. Depending on the potential needs within that range, the type of coverage is another critical consideration.
Many insurance policies will specifically exclude coverage for documents under the contents verbiage of the policy. Instead, insurers want customers to address specific coverage of documents under the valuable papers portion of the policy. Valuable papers coverage is often described in the policy as the time to research, verify, and recreate files or information that have been damaged in a loss. Valuable paper coverage is broad and often will address the issue of document reproduction or imaging.
Valuable papers coverage is a reasonable “extension of coverage” on insurance policies, with coverage amounts ranging from $25,000 for standard coverage to several million dollars for specialty classes of businesses. Standard limitations may be adequate for small losses, but most likely will not be adequate to cover a major loss that would require the treatment of large numbers of documents. Ironically, the rule of thumb in the document restoration business is that the average client is under-insured.
Often, the key variable is how the adjuster will interpret the policy. Some adjusters will allow drying and cleaning documents to fall under business personal property coverage because the documents are tools used for conducting business. This enables the original documents to be dried and/or cleaned and returned to use. The argument is documents such as medical charts are not just valuable papers or papers per se. The information on them is organized, regulated in how it can be amended or altered, and the charts must be bound in a specific manner.
An important element of adequate insurance coverage is the quality of the claims handling process, which can be defined as the immediate response to the loss. Specific wording to this effect in the insurance policy will help, as will periodic meetings among the insured customer, insurance professional, and document restoration firm over the course of the policy period.
4. Preselect the Right Document Recovery Firm
There are only a handful of qualified document recovery firms in the United States. Preselecting one of them is not a process that should be taken lightly. Risk managers, who are serious about defining their exposure, should conduct in-person interviews with key document specialists — as opposed to area representatives or salespeople — from the firms they are considering.
There is no standard pricing in the document recovery industry. Basic services are typically measured by the cubic foot. However, one firm may charge $40 per cubic foot for drying and $35 per cubic foot for labor, handling, and packaging, while another will charge an all-inclusive $72 per cubic foot for these services.
There are a number of differentiators among these firms in addition to price. Do they have the capability to handle a document restoration project on-site if necessary? What security measures do they employ — both on-site and in their plant? How quickly can they respond to a loss and provide a complete quote for the work? What is their backlog? Can they provide access to documents during the recovery process? Do they do the work in-house, which is preferable to ensure a timely response and open lines of communications between client and document recovery firm, or do they subcontract to another vendor? Do they itemize invoices, including all services and supplies? Are they appropriately insured, including sufficient pollution coverage?
Lastly, there are a number of external signals about a document recovery firm’s qualifications. Firms that are preferred vendors with well-known national insurance carriers have qualified on the basis of security, financial stability, quality control and accountability. Letters of recommendation from previous clients is also a good indicator of past performance.
Source: Risk Management Monitor
Author: Rob Schmidt
