What’s your insurance agency back-up plan?

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Does your agency have a continuity or back-up plan in case of natural disaster?

It’s hurricane season, and as of right now, Tropical Storm Bonnie may be forming just off South Carolina. Oklahoma is getting hit with more and more earthquakes. Houston has flooded twice this spring. Does your insurance agency have a back-up plan to keep you humming, whether rain or snow, sleet or hail?

Just as it’s hard to be gloom-and-doom when the sun is shining and summer’s on the way, it’s hard to think about an agency continuity plan when business is growing. As an agency owner or manager, you probably don’t see the need for spending time on a business recovery plan, should a natural disaster strike your area. After all, what are chances of it happening to you?

Hmm, sounds like the same scenario you preach to potential clients. Losses happen – whether or not you’re prepared for them. So the key is – PREPARE.

Related: Does Your Agency Have a Disaster Recovery Plan?

The Insurance Institute for Business & Home Safety (IBHS) has created an easy-to-follow kit to help you as a small business owner prepare for any kind of business interruption, so that you can quickly reopen and resume business following a disaster.  We recommend you download it (it’s free) and put it to good use.

Here’s a brief overview of what you’ll find inside their “Open for Business” kit: step-by-step instructions followed by downloadable forms you can use in your preparedness planning.

First up is identifying your risks, and then ranking them by severity and probability. These threats can range from earthquake or flood, to power outages, workplace violence and more. Your city may be able to provide a local hazards vulnerability analysis that will give you insight as to potential natural and man-made hazards for your area. Those that you rank the highest should be your first risks for which to nail down a plan.

Next, consider the impact of these threats on your agency:

  • How will they impact your ability to do business?
  • If one should occur, who would you need to contact?
  • Which of your agency functions could be handled remotely, by employees at home?
  • Which of those functions have legal, contractual or regulatory aspects that you must continue to fulfill while your agency is impaired?
  • What work-arounds can you deploy for each of those functions, to keep your business humming?

Third, think about your people: employees, customers, vendors and other contacts

  • Do you have a list of employee home and mobile phones and personal email addresses – and is a copy stored offsite?
  • Do they know how to contact you to find out if the office is open or how long it will be closed?
  • Should the disaster occur during work hours, do you have all employees’ emergency contacts?
  • Can you access a client list offsite, should you need to email them about the situation? How will you handle communications to ensure you don’t lose any clients? Since most of your clients are no doubt in your surrounding area, they will be calling for claims information and help.
  • Can you also access a list of vendors and business contacts from offsite, including, for instance, carriers, third party administrators, MGAs, your bank, building management company, payroll service, internet service provider and more?

Speaking of the internet, you’ll want to ensure you have access to all passwords and logins offsite. What data is crucial to keeping your business going? Create backups on more than one medium, such as a thumb drive and the (secure) Cloud. Back up computer files, specifically accounting, payroll, tax and client records. It’s also a good idea to keep a backup copy of each computer’s operating system, boot files and critical software.  Finally, you’ll want to keep a current inventory of all computers, printers and other digital equipment, including serial numbers.

Related: Insurance cyber attacks, data breaches and your agency

Last, how are you going to bankroll the agency during this time? Consider an emergency cash reserve fund and have a line of credit or a business credit card available. Create a payroll continuity plan so that employees know what to expect. Talk with suppliers, utilities, your landlord, etc. and work out an interim payment plan if necessary. And of course, report your losses asap so that your claims adjuster can get your case moving quickly.

Not only does IBHS’s kit provide forms to help with planning, they also provide a scenario to help you hone and test your preparedness plan.

Need more help? Check out additional resources in an earlier blogpost, Does Your Agency Have a Disaster Recovery Plan?

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