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According to Gartner Group, 40% of companies that experience a catastrophic event or prolonged outage never reopen. And one in three of those who do resume business fail within two years. Bottom line, after two years more than half the companies affected by a catastrophic event are out of business.  There are lots of reasons.  In addition to the potential loss of customer good will, the cost of trying to resume operations can be just too much to bear. 

How about your agency?  How would you fare if disaster struck your office or town?  Would you be able to get your business up and running again?  How long would it take?  If you had been a New Orleans agent would you be the one up and running within a couple of days (albeit from an alternate location some distance away) or would you still be scrambling to find a way to help yourself, much less your customers?  Would you be one of the survivors?

We can minimize the potential for some disasters by maintaining a safe and fire-resistant facility. but there are some disasters we cannot prevent or control. For those, the only option is to plan for recovery.

The goal is to minimize the negative impact of a catastrophe on your agency’s ability to do business and maximize the assistance the agency can lend to clients in the case of a large-scale community disaster.

Both before and during a disaster there are a lot of decisions that must be made. Survival depends on being able to answer the following questions.

If your facilities are badly damaged or uninhabitable, where can you set up shop?

Do you have branch locations that could typically house some or all of your staff?  Could some people work from home? Perhaps your local landlord may be able to help if the damage isn’t widespread. Or, do you have an alliance with other agencies that may be able to help out with facilities and/or customer service support? Do you subscribe to a disaster recovery service that will provide a mobile office unit that will act as an interim brick and mortar facility that include generators, furniture, computer equipment and satellite voice and Internet communications? According to the Atlanta Journal Constitution, that’s how Eustis Insurance and Benefits, a New Orleans agency, got up and running within just a couple of days. Most affected agencies were still wringing their hands.

How can you/will you communicate with your staff? 
Do you have a current listing of all their phone numbers, personal email accounts and alternate contacts? Who is going to contact these individuals and what information are they going to convey? The larger the agency and the more locations involved, the more complex this task becomes. You’ll need to get information to them about what steps have been taken, where and when to report to work, what’s happening with paychecks, and more. 

A calling tree is a tried and true method of making contact. Also, think about designating a special telephone/voicemail number that employees can call to obtain the latest information on the status of recovery, timeframes for resuming operations, etc. Email could help, as could putting the information up on your website. Just remember that phone and Internet access was practically non-existent along the Gulf Coast for an extended period of time after Katrina. You need contingency plans for your contingency plans.

If you have to relocate either temporarily or permanently – or your normal phones aren’t working – how will you contact your customers to let them know how to reach you so you can help them?
Remember, one of the major reasons for disaster-affected businesses to quickly fail is loss of customer goodwill. If this is a community-wide disaster such as a hurricane, your customers need to know how to mitigate their losses as well as submit their insurance claims. If it’s a limited impact catastrophe such as a major fire, your clients need to know that you will still be there for them when they do need you.

Holding media briefings and press conferences can help in the accurate and timely mass distribution of information. Press releases should be developed and distributed along with Fact Sheets and Q&A sheets for the press. Make sure that there is only one designated spokesperson for the company (with an alternate) to ensure consistency of the agency’s message. This spokesperson must be a top company official to provide needed credibility.

Contacting your VIP clients personally early on is critical. Publishing the information to your website can be an excellent way to communicate. Your website is an excellent place to post the phone numbers and/or web addresses of your key companies’ claims reporting facilities. Sending e-mail messages to your clients and broadcast faxes are also effective methods of communication in some instances. Paid newspaper, radio or television announcements are other ways to communicate with your external stakeholders. In the event of a major disaster, there is no such thing as over-communication.

How will you gain access to your client records assuming they are destroyed—or simply declared off limits? 
For relatively short-term system outages, do you have access to a service such as CSR24/Service 911? They can set up a special phone line for your customers to call in to directly, or you may be able to transfer your phones to them. As importantly, if you have Internet access, you can actually use such a service to look up your client information yourself. Does your agency management system vendor have an on-line option? How long will it take to get up and running? To use your vendor as a disaster recovery option, you’ll need to be able to ship them a current backup of your system. Do you know that your system backups are safe and valid? Are the instructions on how to activate such a service documented and known to key staff members? Do you have backups or master copies of non-agency management system software that your agency relies upon?

And speaking of back up and recovery, are you storing back-ups off site, preferably electronically. On-line data storage, either provided by your management system vendor or a third party, is reliable and secure and, depending on Internet connectivity availability and speed, is generally easier to restore than tape back-ups. If you are still using tape back-ups, are they current and secure?

The bottom line is that the future of your agency is at stake if a major catastrophe should hit. A comprehensive Disaster Recovery Plan can mean the difference between survival and the demise of your business. A good disaster recovery plan will:

  • Provide guidelines to help prepare for a possible business interruption.
  • Outline initial steps to determine if the plan needs to be executed.
  • Assign and describe duties for each member of the business resumption team.
  • Communicate clearly to employees about the actions that have been taken and provide an external communications guide.
  • Provide a framework for ongoing improvement and updating of the plan.

Teamwork is the key to successfully planning and executing a Disaster Recovery Plan.

If you do not already have a Disaster Recovery Plan, start with a Planning Team that includes key decision leaders who will analyze the potential threats and answer those important questions – before any disaster occurs.

Your Plan should include a Business Resumption team made up of decision makers who will assess the situation and make the initial determinations regarding implementing the disaster recovery plan. They will travel to the office as quickly as possible to determine the extent of the damage as well as estimate the length of time required to get back operational.

You will also want to designate functional Recovery teams that includes areas such as communications — both external and internal; Information Technology; alternate sites/move coordinator; services and logistics; salvage and security; customer service; and environmental. These functional teams are charged with getting the various areas of operation back on line as quickly as possible. An individual may be assigned to more than one area, but it is important to spread the responsibilities across the organization in order to get all functions up and running a quickly as possible.

Sadly, most businesses do not have a Disaster Recovery Plan, and that includes most of your insureds. Disaster Recovery planning can save your business. It can also be a value-added assist you can give to the businesses who are your customers. With a Disaster Recovery Plan you – and they – can be one of the survivors..

If you'd like help putting your agency disaster recovery plan in place, give us a call, we can help.


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