Disaster Recovery Planning Considerations

Natural disasters can come in many forms, with the most common being related to windstorms, fires and flooding. More tornadoes occur in the United States than in any other part of the world. While large-scale disasters capture media attention, disasters can also be local in nature, such as electrical blackouts from lightning strikes or a vehicle collision with a power line. Such events can cause significant disruption to your operations.

With proper planning, downtime and loss of revenue can be kept to a minimum and operations quickly restored. A formal disaster recovery plan is critical to ensure continual operations for your business, and should incorporate the following elements: 

•  An organization-wide disaster plan approved by top management and the board of directors

•  A key management person designated as the plan coordinator who has responsibility for the disaster management committee

•  Disaster management coordinators and office leaders with defined duties

•  The plan is part of your risk assessment protocol

•  The plan is based upon a comprehensive business impact analysis

•  A formal agreement exists for an alternative processing site and equipment

•  Offsite backups have been tested and audited

•  Regular disaster drills are run

•  Your IT security has robust access control and security protocols

Special attention should be given to the following areas, as they pose pitfalls that can cause the best of plans to falter.

Communication Issues. In a typical community-wide disaster, only about one-third of the disaster team will be able to make it on site due to blocked streets and problems at home. It is, therefore, important to have reliable communication alternatives such as cell phones with out-of-state area codes and text messaging capability. Alternative meeting places should be set out in the event that the planned location is inaccessible. Employees also need solid identification credentials showing them as your employees to allow them access to otherwise restricted areas.

Authority Issues. Local branch managers or designated disaster leaders need to have authority to start immediate remedial repairs. Past disasters have shown that much time is wasted while local personnel try to get authority to hire a contractor, who is on the scene, to start repairs. Insurance carriers not only allow but encourage such loss mitigation efforts.

Contractors/Vendors. It is wise to get a commitment from a local remediation contractor for a priority response to any catastrophic event. Such companies should be skilled at emergency remediation measures. Also, since many companies use local suppliers who are just as likely to be experiencing issues because they are also located in the affected area, it is important to evaluate their continuity plans to ensure timely reinstatement of goods and services.

Power Sources. A reliable power generation system is a vital part of any disaster plan. Whether it is a diesel or natural gas-powered system, it needs to be tested monthly under a full-power demand load in order to assure reliability. Recent disasters have shown that as many as 30% of power generators will fail to support power demands when needed.

Data Backup and Recovery. Fires, floods and hurricanes can destroy internal and external storage drives in a matter of seconds. It is difficult to protect all of your hardware from all possible disaster scenarios. Hardware can be replaced, but precious data needed to maintain business operations cannot. As such, offsite backup of data is critical to ensuring preservation. Data can be stored at other company facilities away from the affected area. For businesses that lack other facilities, cloud-based storage systems are an effective means of backing up data.

Small Things. Experience shows precautions can yield great loss savings. If you have enough warning of a pending disaster, putting all valuable papers and inventory records in the vault can preserve them when needed. Unplugging and covering sensitive computer and other office machines with trash bags can save them and their internal records from water damage. Duct taping windows can avoid damage from shattered glass.

With a good disaster recovery plan in place and attention to detail, you should be able to rapidly recover from any catastrophic event with the least amount of damage. While the above points pertain to natural disaster recovery methods, natural disasters are not the only type of disaster your business may face. Data security breaches, sabotage and pandemics (widespread health scares) are becoming more prevalent and warrant loss mitigation plans.

This content originally appeared on The Central Insurance blog at blog.central-insurance.com.