Whether natural or man-made, a catastrophic event can be a life-altering experience that will place your livelihood in jeopardy. Flood, fire, tornado, hurricane, seismic, wind, civil violence—all are part of what you insure against. But, beyond that, what steps should you take to maintain and rebuild? Who do you call…what do you say…what do you do? What’s first?
Ask anyone who has been through a disaster, and they’ll tell you there are no easy answers. Thinking clearly is difficult because you will be in shock not only because of the event, but what you can imagine lies ahead. There’s little that can be done beforehand to prevent them, but being prepared for the unexpected can help you protect your assets, and the steps you take in the days and weeks after a disaster could determine how well you’ll bounce back.
REVIEW YOUR INSURANCE COVERAGE NOW
A plan starts before a disaster happens. The most important element is to make certain you have the right insurance coverage in amounts and deductibles that are realistic. From those that have gone through it, one of the most often cited shortcomings is insufficient coverage in business interruption, bailee, or no flood coverage. (Flood insurance is sold through the federal government’s National Flood Insurance Program; visit www.fema.gov/business/nfip/). Review your coverage and always insure through a company that specializes in coverage specific to our industry. An off-the-shelf general business coverage policy simply is not adequate. A word to the wise, buy replacement coverage, not cost.
Building damage coverage is another insurance area cited by those that have been there. In several instances the lessee discovered that the building owner did not have any coverage on the building or shopping center. A typical lease requirement specifies the amount and that the property owner be named as co-insured. However, do you know if the owner has insurance on the property that kicks in at the limits of yours? In case of disaster does your lease continue or can it be terminated? Find out now. You may be surprised.
Here are some additional safeguards:
- Keep your insurance policies in one safe place offsite. Have important contact numbers written down.
- Here’s a BIG ONE. Make certain to back up and store customer information on another computer or electronic device off-site. This may be the single most important element of knowing who had what in the store at the time of the disaster. It will prove to be one of your most important business decisions. Start doing it now.
- Work with other responsible parties in your business to further develop a plan of action and share it with others for their input. Create and keep more than one copy of any plan and make sure it’s in a safe off-site location. As your business changes, review it from time to time. A few minutes now could save hours and days in the future.
DISASTER PLAN PROCEDURES
Here are suggestions to include in a disaster plan. Add your own important items.
When The Worst Happens, Now What?
1. Assess the situation, notify your insurance company, and secure the premises
Call your insurance company and secure the premises by whatever means available. Seal it off from the public, even going so far as to put paper up in the front of the store so that people cannot see inside. As Dennis Loomis explains, “The more damage they see, the less likely they are to come back as a customer. Another reason is many times some of the clothing can be saved….and if you keep that [image of damage] outside of the customer, not only is the customer more likely to come back, but they’re also more likely to accept the garments re-cleaned,” which reduces loss. “They see the inside, they just automatically make up their mind that the clothes are gone.”
2. Keep associates in the information loop and working
This reassures employees that they still have a job. Keep them active during the cleanup and rebuilding process even if they are being paid through business insurance. Business interruption insurance can be a great help if a long recovery process lies ahead. Otherwise, they may go work someplace else in the interim and not return.
3. Notify your customers
How to get the word out to customers is always a big concern. Do it right and do it quickly and you will find customers are on your side. They’ll work with you so long as they know you are making every effort to make things right. Here’s how:
- If possible, hang the largest banner you can get at the disaster location stating the basics—how to be in touch, that you are insured, etc.
- Have a company representative on the scene as much as possible that can listen to whatever a customer has to say and carefully respond to simple questions. Be prepared with a set answer to the question, “What are you going to do about my clothes?”
- Take out a display ad in the local newspaper saying the same things.
- If there is cable TV in the area, post a message on the community page.
- If you have e-mail capability and have backed up your customer information off-site, e-mail a personal message.
- Designate or install a dedicated telephone line that has a reassuring recorded message and offer the opportunity to leave a brief message.
- Take the time to respond to requests from TV, newspaper, and radio reporters and producers. Ten on-air seconds or a story in the local paper represents your best opportunity to get and keep the community on your side. In fact, if the media doesn’t contact you then contact them yourself.
4. Get the work done some way, somehow
If you do not have another operating facility, find an undamaged plant that could process work or one that specializes in restoration to save as much as possible to return to customers. You’ll have to pay for this so make sure you have sufficient coverage to do so. As part of the deal, you may have to have your employees assist in completing the work in another plant. Keep a close eye on this type of arrangement and remain in constant contact with the facility responsible for processing the work. The strain on everyone will be evident so quickly address any problems or concerns. Quality will probably suffer somewhat, but other than making the best of a bad situation there is little you can do to overcome this perception.
5. Set up in a temporary location
Using your insurance coverage, find and set up in a temporary location. This could be a rental trailer or an undamaged nearby building. This will serve as your headquarters to handle customers’ claims as well as an area where customers can retrieve undamaged or restored garments and perhaps drop off others. Keep control of your customers’ orders.
THE WORST IS OVER
For full-scale disasters, rehabilitation is a long, arduous task. It can sometimes take six months to a year. But when it’s all done, have a grand re-opening thanking all your customers for their continued support and patience. Don’t forget to invite all the media to follow-up on their previous disaster story.
This article is from DLI’s Management-No. 7