In the blink of an eye, you could be facing a disaster at your facility. Whether it be natural disasters like hurricanes, tornadoes, flooding or wind and hail, or man-made events like arson, vandalism, burglary or a pollution-type exposure, a major disaster could cripple your business. Creating a disaster preparedness plan will not only save you time and money but it could be the key to keeping your business afloat.
A good disaster plan starts with a key list of emergency contacts including fire and police department, insurance agent, electrician, plumber and HVAC contractor. In addition, updated lists of tenants, employees and vendors should be readily available. This information should be backed-up and retained off site. A site map or diagram, building plans and bank account records should also be kept at an off-site location.
It is important to consider privacy implications when backing up tenant records. It is your responsibility to keep that information safe. If a data breach occurs, you have the duty to notify customers and comply with state and federal regulations. All facilities should consider a cyber liability insurance policy that includes legal services that can assist in determining regulatory obligations and notification requirements.
For employee safety, there should be an emergency kit on site including a first-aid kit, water, radio, and lighting including batteries, tools, whistle, fire extinguisher and blankets. Businesses should plan for disruption in utility services. Determine what utilities are necessary for continuing your business and contact your local provider to see what back-up options are available for phone service.
To prevent arson, vandals and burglaries, facilities should consider perimeter fencing at least 6 ft high as well as a surveillance system with a sign advising the facility is monitored. Central station burglar and fire alarms are always recommended, especially for the office.
Contact your local disaster restoration company to see if they offer a preparedness assessment. ServPro’s ERP (Emergency Ready Profile) helps an owner prepare by building a profile that can be accessed immediately through an app on your phone. This profile includes critical information that can be provided to authorities including the location of shut-off valves and areas of priorities. This minimizes interruption to your business.
All of these items above should be part of your business continuity plan and should be updated regularly. You can review and create your own plan at www.ready.gov. This plan should be shared with your insurance agent who will use this information to present your facility to underwriters for the most competitive insurance policy available. The more information you provide to your agent regarding disaster preparedness, safety features and updates to plumbing, heating & electrical and roofing, the better an underwriters can use this information justify applying credits to your insurance premium.
When a disaster is imminent
Access to the facility should be restricted if there is an extreme weather situation pending. During a storm or disaster, only emergency personnel should be allowed on site. If there is a fire, no matter how small, it is important to call the fire department immediately and evacuate the premises. All employees should be trained on the proper use of fire extinguishers. Employees need to understand safe use of fire extinguishers and to never try to fight a fire that is spreading.
When the facility is safe to approach, it is your duty to protect your buildings from further damage. Secure the property, contact local authorities and then call your insurance agent to report the claim in a timely manner. Take photographs and document all damage.
After a loss, your lease agreement is your first line of defense against law suits. Your lease agreement should be written, or at least evaluated by an attorney who specializes in self storage. Your lease agreement should be reviewed and updated regularly, especially when there is a change in your state’s lien law. Attorneys will advise that value limitations are an important part of the lease agreement. Another way to protect yourself from disgruntled tenants is a strong tenant insurance program. It is much easier to make that phone call to a tenant that is insured rather than one who declined tenant insurance after a loss.
For property and liability insurance, It is important to work with an insurance agent that understands the self storage industry. Agents who specialize recognize the need for business income with extended periods of indemnity, customer goods legal liability, wrongful sale liability, hazardous content removal coverage, and pollution.
According to FEMA, 40% of businesses do not reopen after a major disaster. The SBA indicates that an additional 25% of those businesses fail within two years following the loss. When we take the statistic from Claims Journal that 75% of small businesses do not have a disaster plan, these numbers provide a valuable lesson. Planning ahead and taking the steps to develop a disaster preparedness plan is the key for continuation.