Is Your Business Prepared for the Next Big Earthquake? Protecting Your Enterprise from Natural Disasters

Review Your Insurance Coverage

Every year, numerous businesses face temporary shutdowns or permanent closures due to disasters. The recent 6.4- and 7.1-magnitude earthquakes near Ridgecrest, California, serve as a stark reminder of the potential disruption an earthquake can cause to business operations. Despite being in seismically active areas, only one out of ten commercial buildings in California is insured for earthquakes, according to the California Department of Insurance. This highlights a significant gap in disaster preparedness among businesses.

Develop a Business Recovery Plan

The threat to business operations isn't limited to earthquakes. Hurricanes, tornadoes, and wildfires also pose significant risks depending on the business's location. According to the Federal Emergency Management Agency (FEMA), over 40% of small businesses in the U.S. do not reopen after a disaster impacts them. However, by developing a comprehensive business disaster recovery plan, businesses can significantly increase their chances of financial recovery post-disaster. The Insurance Institute for Business & Home Safety (IBHS) offers a free, customizable toolkit to help businesses prepare for any type of business interruption.

Take a Business Inventory

Creating a detailed business inventory is crucial for facilitating the filing of a business insurance claim. This inventory should list all equipment, supplies, merchandise, and commercial vehicles. A well-maintained inventory can streamline the claims process and ensure that businesses receive the appropriate compensation for their losses. Entrepreneurs who neglect to purchase the right type and amount of coverage, including earthquake insurance, risk jeopardizing the enterprise they worked so hard to build, leaving themselves and their business on shaky ground.

In conclusion, businesses must take proactive steps to protect themselves from natural disasters. Reviewing insurance coverage, developing a business recovery plan, and maintaining a detailed business inventory are essential measures. By doing so, businesses can ensure their resilience and ability to recover financially from any disaster.