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Disaster prep tips for small and home-based business owners

(ARA) - Nearly 30 million small businesses operate in the United States, according to the Small Business Administration Office of Advocacy. They employ just over half the country's private sector workforce and hire 40 percent of high tech workers, such as scientists, engineers and computer workers.

"With 52 percent of small businesses located in homes, it is important for these business owners to protect their personal and business assets properly," says Bruce Peterson, a senior vice president with Fireman's Fund Insurance Co. "Employee and family member safety comes first in the event of fire, flood, earthquake, windstorms, or any other physical loss."

Whether a natural disaster such as flood, hurricane, earthquake, or tornado strikes, an individual loss occurs from a fire, flooding from a washing machine or a burst frozen pipe, or theft occurs, it is important that the business can survive and resume normal operations. Disaster preparedness is the key and it can be simple.

Fireman's Fund Risk Services consultants recommend these steps to prepare your home-based or small business to cope with any disaster:


* Make an evacuation plan and practice with employees and family members.

* Change all smoke alarm batteries once a year.

* Be sure fire extinguishers are available and in working order.

* Keep supplies such as canned food, water, batteries and flashlights easily accessible.


* Inventory items and equipment used in the business. Video or photograph the items and keep in a location away from the property.

* Pick an alternate location to relocate to temporarily and keep the business running.

* Be sure to back up computer records regularly and store off site.

* Include provisions to cover continuing payroll expenses in your financial plan.

* Create a communication plan via e-mail, phone and/or text messaging to get a hold of employees in the event of a disaster or loss.

* Contact information for all vendors should be kept up to date and accessible, including insurance agent and policy numbers.

* Temporary repairs may be necessary and should be documented.

Having business insurance is another important way small business owners can prepare their companies to deal with possible disasters. Business insurance usually covers things like business interruption, lost wages, lost revenue and extra expenses such as temporary rental space, equipment and moving expenses.


"Business insurance can mean the difference between staying in business and having to shut down after a loss," says Petersen.

It is important for business owners to discuss the emergency plan with employees, and provide training and periodic testing of the plan, according to the Institute for Business & Home Safety. Employees should be notified any time changes are made and a current copy of the plan should be kept where employees can refer to it easily.

Protect your business by carrying proper limits of liability insurance. Homeowner insurance won't cover business liability losses. Business insurance is separate from personal insurance. Worker's compensation, employer professional liability, libel and slander coverages, etc. must be considered to protect the business owner in case of lawsuits.

Automobiles that are used for business and may be driven by employees in the course of employment require a separate commercial auto insurance policy.

Insurance agents are usually small business owners themselves and offer great advice to their fellow small business owners. They are local and knowledgeable of the resources in the community. Protecting your business investment is key to its survival and prosperity. Take time to plan ahead and avoid stress later.

Published February 26, 2011

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