DISASTER PREPAREDNESS AND RESILIENCY TOOLKIT FOR BUSINESSESEDC SBDC

DISASTER PREPAREDNESS AND RESILIENCY TOOLKIT FOR BUSINESSES 2019

ECONOMIC DEVELOPMENT COLLABORATIVE

EDCThe Economic Development Collaborative hosts the Small Business Development Center and is funded in part through a cooperative agreement with the U.S. Small Business Administration.

TABLE OF CONTENTSDisaster Preparedness Survey 1

Disaster Preparedness Checklist 5

Steps to Take After a Disaster 6

Business Recovery 7

Working with Your Insurance Company 8

Business Interruption Worksheet 9

Commonly Asked Questions 10

1

Which of the following best describes your business? •S-Corp •Incorporated •SoleProprietor •LLC •Noresponse

What industry is your business in? •Retail •Service •Restaurant •Construction •Manufacturing •Finance,Insurance,RealEstate •Other

How long have you been in business? •Start-upphase •1yearorless •2to5years •5to10years •10to20years •20yearsormore

Do you own or lease a physical business location? •Own •Lease •Noneoftheabove,Iworkathomeorhaveavirtualoffice •Other

Do you currently have a monthly business loan that you make payments on? •Yes •No

How many employees does your business employ, including yourself? •One(selffull-time) •One(Selfpart-time) •2to5 •6to10 •11+ •Other

DISASTER PREPAREDNESS SURVEY

Thisdocumenthasbeenpreparedforbusinessownersthatareinterestedinincreasingtheir disaster readiness or have just experienced disaster or man made disruption. Wetrustthefollowingsurvey,checklistandbestpracticeswillservetohelpyou navigateyourbusinessthroughrecoverytoresiliency.

2

What type of internet connection do you have at your place of business? •Directinternetconnectionvia“wirecable”intomyphysicalbusinesslocation •Awirelessor“hotspot”internetconnectionviamycellphoneprovider •Ihavebothtypesofconnectiontotheinternetavailable •No,Idon’thaveaninternetconnectionatmybusiness

Do you back up your business data regularly? •Yes,toaserverlocatedatmyplaceofbusiness •Yes,toaservernotatmyplaceofbusinessi.e.“thecloud” •Yes,Imakepapercopiesofeverythingandstorethematalocationotherthanmyplaceofbusiness •No,Ihaven’tbackedupanyofmybusinessinformation •Other

Do you have a disaster recovery plan in place for your business? •Yes •No,butIhavethoughtaboutit •No,neverthoughtaboutit

What do you perceive as the greatest disaster threat to your business? •Fire •Earthquake •Flood •Extremestorms •Burglary,riots,disgruntledemployees,etc. •Other

Do you currently have disaster supplies, i.e. emergency water, food, etc, (enough for you and your employees) at your place of business should a disaster occur during business hours? •Yes •No,butI’vethoughtaboutit •No,neverthoughtaboutit

How long would it take you to reopen your business after disruption from a disaster? •Instantly,notaproblem •Oneweek •Twoweeks •Beyondamonth •NotSure •Iwouldnotbeabletoreopen

DISASTER PREPAREDNESS SURVEY CONT.

3

How long can you operate your business without potable drinking water before it affects the function of your business and your company’s bottom line?•Ican’toperateatallwithoutrunningdrinkingwater•1day•2-3days•Upto5days•Aweekormore•Doesnothaveaneffectonmybusiness

How long can you operate without electricity before it affects the function of your business and your company’s bottom line? •Ican’toperateatallwithoutelectricity •1day •2-3days •Upto5days •Aweekormore •Doesnothaveaneffectonmybusiness

Other than rapidly restoring water and power, what is the most important action(s) the State can take to assist your business immediately after a disaster?Do you have a backup generator at your place of business? •Yes •NoIf a disaster occurred, would you be able to operate your business from another location? •Yes •No •Noresponse

If Yes, how long? •1Day •2-3Days •Upto5days •Aweekormore •Doesnothaveaneffectonmybusiness •Noresponse

Do you currently carry natural disaster insurance for your business? Choose all that apply: •Yes,floodinsurance •Yes,fireinsurance •Yes,earthquakeinsurance •No,Idon’tcurrentlyhavenaturaldisasterbusinessinsurance •Other

DISASTER PREPAREDNESS SURVEY CONT.

4

DISASTER PREPAREDNESS SURVEY CONT.Do you currently carry business interruption insurance?•Yes•No•Idon’tknow

If you are a home-based business, do you have separate business insurance?•Yes•No•Idon’tknow

Please rate the items listed below in terms of their importance for your business operations. Select one rating for each:1 = Least Important, 2 = Not That Important, 3 = Neutral, 4 = Important, 5 = Most Important•Electricity•Water•NaturalGas•Phone/Internet•SewerandWasteWaterTreatment•Postal•Transportationi.e.roads,rail,air•PhysicalLocation

How would you keep in touch with customers after a disaster disrupted your business? Please select all that apply:•Email•Phone/Text•Website•Facebook•Other

5

DISASTER PREPAREDNESS CHECKLISTWHAT TO DO BEFORE, DURING AND AFTER A DISASTER

•KnowYourRisk.CheckwithFEMAmapstodetermineifyourbusinesslocationisvulnerabletoflooding,fireorothernaturaldisasters.Haveyourbuilding(s)inspectedbyalicensedprofessionaltofindoutifyourworkplaceisvulnerabletonaturaldisastersandwhatisrecommendedtoretrofit.

•TaketheNecessaryPrecautions.Ifadisasterthreatensandyouareable,secureyourbuilding.Coverwindows.Coverandmoveequipment/furnituretoasecuredarea.

•AlwaysProtectYourDataWithBackupFiles.Ifdependentondataprocessing,consideranalternatesite.Makeprovisionsforalternatecommunicationsandpower.

•MakePlanstoWorkwithLimitedCash,NoWater,SewerorPowerforuptoTwoWeeks.Storeemergencysuppliesattheoffice.

•ProtectYourEmployees.Employeesafetycomesfirst!Prepare,distributeanddiscussyourbusinessdisasterplan for recovery. Consider providing shelter to employees and their families and helping employees withsuppliesafteradisaster.Establisharendezvouspointandtimeforemployeesincasedamageissevereandcommunicationsaredisrupted.Establishacall-downprocedureforwarningandpost-disastercommunications.ProvidephotoIDsandaletterofauthorizationtoenterthebuilding.

•ContactYourCustomers&Suppliersandshareyourcommunicationsandrecoveryplaninadvance.Prepare a list of vendors to provide disaster recovery services.

•ReviewYourInsuranceCoverage.Haveyourbusinessappraisedatleasteveryfiveyears.Inventory,documentandphotographequipment,suppliesandworkplace.Havecopiesofinsurancepoliciesandcustomerservice/homenumbers.ObtainBusinessInterruptionInsurance.Consider“AccountsReceivable”and“ValuablePapers”coverageand“IncomeDestruction”insurance.IfyouhaveaBusinessOwnersProtectionPackage,checktheco-insuranceprovisions.Remember:Flooddamagetypicallyrequiresseparate coverage. Check your policy for coverage.

•Afterthedisaster:usecautionbeforeenteringyourbusiness.Checkforpowerlines,gasleaksandstructuraldamage.Ifanyelectricalequipmentiswet,contactanelectrician.Preparelossinformationforinsuranceclaimsandgetindependentestimatesofdamages.Takepicturesbeforecleanup.Minimizeadditionaldamage.

6

STEPSTOTAKEIMMEDIATELYAFTERADISASTERSTEP 1

Findyourbusinessinsurancepolicy.Besuretoreadthepolicycarefullytoclarifywhatlossesyourinsurancecompanycoversandwhatlossesareyourresponsibility.Ifyourinsurancedocumentsweredestroyedinthedisaster,donotpanic.Callyourinsuranceagentorinsur-ancecompanyandrequestacopyofyourpolicy.Askfortheentirepolicy--notjustthecoverpageorthedeclarations.Ifyoudonotknowthenameofyourinsurancecompanyorinsuranceagent,checkwithyourmortgagelenderorwithyourbank.Theymayhaverecordsofyourinsuranceinformation.Ifthoseoptionsareunavailable,calltheCaliforniaDepartmentofInsurance(oryourstatesDepartmentofInsurance)whichcanbereachedat1-800¬927-HELP(4358)orathttp://insurance.ca.gov/.

STEP 2YoushouldcontactyourinsuranceagentorinsurancecompanyIMMEDIATELYtobegintheclaimprocess.Mostpoliciesrequirethatthebusinessownerpromptlynotifytheinsurancecompanyofdamageorlosses.Forthatreason,itisimportantthatyoubegintheclaimsprocessassoonaspossible.Youshouldcontactyour insurance agent or insurance company even if you do not know if you are covered or if your claim may notexceedyourdeductible.Ifyouhaveseparatefloodinsurance,alsocallyourfloodinsuranceagenttoreportyourclaim.YourinsuranceagentwillprepareaNoticeofLossform,andanadjusterwillbeassignedtoassistyou.Mostinsurancecarriersandstatedepartmentsofinsuranceofferatoll-freetelephonenumbertofacilitatetheclaimfilingprocess.Whenyoucallyourinsuranceagentorinsurancecompany,bepreparedtoprovide:•Thenameofyourinsurancecompany(youragentmaywritepoliciesformorethanonecompany)•Nameandaddressofinsured•Yourpolicynumber•Contactname,phoneandfaxnumber•Locationofloss•Briefdescriptionofloss

Whenyoucontactyourinsurancecompany,askwhenaninsuranceadjuster(apersonprofessionallytrainedtoassessthedamagetoyourproperty)canbeexpectedtovisityourpropertysothatyoucanplanforthevisit.Alsoasktheinsurancecompanyforthespecificinformationrequiredfortheproofofloss.Somecompaniesmayhaveadetailedlistofdocumentstheyseekorrequireyoutofilloutaparticularform.Aproof of loss provides details identifying the property destroyed or damaged and documents the amount of loss incurred. Keep your insurance company informed of your current contact information. If you are in a shelter or cannot easilybereached,makesuretogiveyourinsurancecompanyoragentthecontactnumberofafriend,relativeorsomeoneelsewhoknowshowyoucanbereached.Whendealingwithyourinsurancecompany,documenteveryconversation.Besuretowritedownthenameofthepersonwithwhomyouspeak,thedateandthesubstanceofyourcallandyourclaimnumber.Itmaybehelpfultokeepallofthisinformationinanotebooksothatitisinoneplace.Thiswillhelpinfuturedealings with the insurance company.

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STEPSTOTAKEIMMEDIATELYAFTERADISASTERCONT.STEP 3

Ifreasonablypossible,protectthepropertyfromfurtherdamage.Damagedpropertythatpresentsahealthhazardorthatmayhamperlocalclean-upoperationsshouldbedisposedof.Besureto adequatelydescribeandphotographdiscardeditemssothatwhentheadjusterexaminesyour lossesandyourrecords,thesearticlesareincludedinthedocumentation.Photographtheoutsideofthepremises,showinganydamageorflooding.Photographtheinsideof thepremisesaswell,showingthedamagedpropertyandtheheightofthewaterifyourpropertywasflooded.However,donotenteryourpropertyifitisnotsafetodoso.Separatethedamagedfromtheundamagedproperty,andputitinthebestpossibleorderfortheinsuranceadjuster’sexamination.

Collectandorganizebackupdocuments.Gatheradditionalinformationanddocumentsfortheproof ofloss.Generally,anyinformationsubstantiatingtheclaim(photographs,receipts,records)canbecomeproofofclaim.Gathervitalrecords,ledgersandotherproofthatsupportsvaluation.Prior to signing an agreement/contract with a cleaning, remediation or maintenance contractor, consult with your adjuster or insurer concerning coverage. If damage in your area is widespread, check with local authorities to see if they are coordinating debris clean-up.

STEP 4 Makealistofareaswithstructuraldamage.Asyoulookoveryourproperty,makealistofstructuraldamage you want to point out to the insurance adjuster. Ifyou’vepurchasedcontentscoverage,makealistofdamagedproperty.Listthequantityofeachitem,adescription,brandname,wherepurchased,itscost,modelandserialnumber(ifappropriate)andyourestimateofthelossamount.Attachyourbills,receipts,photosandanyotherdocuments.Goodrecordsspeed up settlement of your claim.

BUSINESS RECOVERYBestpracticesforbusinessessurvivingamajordisasterordisruption:1. Rememberthatrecoverycanbealong-termprocessdependingontheseverityofthedisaster.

Recoverycanlastmanyweeks,monthsandevenyears.2. Bediligentinthepracticeofself-care.Takeadvantageofmentalhealthresourcesthatareavailableto

you.Donotskipmeals.Besuretoexercise.Getenoughsleep.Thesesimpledailyactivitieswillhelpcreatestabilityasyounavigateanewreality.

3. Know that you may need extra time processing information that is given to you. Be patient with yourselfand engage with services and resources when the time is right.

4. Be your own advocate. Know your rights as an insurance holder and what federal and state resourcesareavailabletoyou.ConnectwithyourlocalSmallBusinessDevelopmentCenter,Women’sBusinessCenter,SCOREorSBAofficetolearnaboutavailablelocal,stateandfederalresourcesyoumaybeentitled to.

5. Askforassistanceevenifyoudonotthinkitisnecessaryinthemoment.Ifyourbusinesshasbeenimpactedbyafederallydeclareddisaster,besuretotakeadvantageofallfederalresourcesavailabletoyou.Forexample,intheeventofafederallydeclareddisaster,theSBAofferslowinterestloanstobusinessesthathavebeenimpacted.Youmaynotthinkyouthatyouneedaloanimmediatelyafteradisasterbutdependingontheseverity,cashflowandsalesmaybeimpactedinthecomingweeksandmonths.

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WORKINGWITHYOURINSURANCECOMPANYIfanadjusterisnotassignedtoyouwithinseveraldays,contactyourinsurancecompanyorthestate departmentofinsurance.Itisagoodideatomaketherequestforanadjusterinwriting.Keepinmindthatanadjusterwillnotbeabletovisityourpropertyuntilofficialsdeclarethatissafe.

WORKING WITH YOUR ADJUSTER Generally,youradjusterwillcontactyouwithin24-48hoursafterreceivingyournoticeofloss.However, dependingonlocalconditionsandtheseverityofthedisaster,itmaytakemoretime.Oncetheadjustercontactsyou,atimewillbesetfortheadjustertoviewyourproperty.Youmayasktheadjusterforan advance or partial payment. Duringtheinitialvisittoyourproperty,theadjusterwilltakemeasurementsandphotographsandnotedirectdamage.Thisiscalled“scoping”aloss.Beassuredthatyouradjusterwillbeanexperiencedclaimprofes-sionalandwillnoticemanypointsofdamageyoucouldoverlook.Youare,however,encouragedtopointoutalldamageyouhavenoticed.Afterthe“scope”isfinished,theadjusterwillgiveyoualocalcontacttelephonenumberandwilltellyouwhetheranyadditionalvisitsareneeded.Theadjusterthenusestheevidencefromthevisit(s)andthedocumentationyouhaveprovidedtocom-plete a detailed estimate of damages. You will get a copy of the estimate. Use it as a guide when you ask forbidsforrepairworkfromlicensedprofessionalcontractors.Youcanalsoaskyourinsurancecompanyforanadvanceonyourinsuranceproceeds.Fundsdisbursedintheformofanadvancewillbedeductedfromthefinalsettlement.Ifyouhaveamortgage,yourbankwillneed to sign the advance check. YoumayalsobeeligibleforexpeditedassistancefromthefederalgovernmentthroughFEMA.YoucanapplyforsuchassistancethroughFEMAonlineathttp://www.fema.gov,orbycalling1-800-621-FEMA(3362),TTY800-462-7585.FEMArepresentativestypicallyvisitdisasterassistancecenters.YourofficialclaimfordamagesiscalledaProofofLoss.Thismustbefullycompletedandsignedandinthehands of your insurance company within 60 days after the loss occurs. The Proof of Loss includes a detailed estimatetoreplaceorrepairthedamagedproperty.Inmostcases,theadjuster,asacourtesy,willprovideyouwithasuggestedProofofLoss.However,youareresponsibleformakingsurethatitiscomplete,accu-rateandfiledinatimelymanner.BesuretokeepacopyoftheProofofLoss-andcopiesofallsupportingdocuments-foryourrecords.

PAYMENT OF CLAIMS Yourclaimispayableafter:•Youandtheinsureragreeontheamountofdamages.•Theinsurerreceivesyourcomplete,accurateandsignedProofofLoss.

Ingeneral,insurancecompaniesshouldacknowledgereceiptofyourclaimwithin15daysofreceivingit and should communicate decisions on claims within 40 days of receiving them. Payouts should occur within30daysofyouracceptanceoftheiroffer.Moreinformationonclaimspaymentisinyourpolicy.

SUPPLEMENTAL CLAIMS Ifyounoticeadditionaldamagetoyourbuildingpropertyorpersonalpropertyafterfilingyourclaim, youmayfileasupplementalclaim.Thismeans,essentially,thatyoumustrepeatthedocumentationandfilingprocessforyouroriginalclaim--includingaproofofloss--butonlyforthenewlydiscovereddamage. Supplementalclaimsshouldstartbyimmediatelynotifyingyouradjuster,agentand/orcompanyrepre-sentative.Onceyouhavecompleteddocumentation,presentittoyouradjuster,whomayneedtomakeanother property visit to verify your loss. Onceyoureceivetheletterstatingthatthecosttorepairdamagetoyourbuildingis50percentormoreofitsmarketvalue,youmayfileanincreasedcostofcomplianceclaim(ICC).Youshouldcontactyouradjust-eroryourinsurer’sclaimsrepresentativetofiletheICCclaim.Youhavefouryearsfromthedateoftheletterdeclaringthebuildingtobesubstantiallydamagedtocompleteyourchosenmitigationactivityunderthetermsofthestandardfloodinsurancepolicy.Yourinsurerwillprovideyouwithadditionalinformationtoassistyou in completing your ICC claim.

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WORKINGWITHYOURINSURANCECOMPANYBUSINESS INTERRUPTION LOSSES

Businessinterruptioncoverageisatypicalandimportantpartofmostbusinesses’propertyinsurancepro-grams.Business-interruptioncoverageispurchasedtocoverthelossofbusinessincomeandatleastsomeoftheextraexpensesassociatedwithrestoringbusinessoperations.Therearemanytypesofbusinessinter-ruptioninsurancepolicies.Itisimportantforyoutoreviewyourstoensurethatyoumaximizeyourabilitytocontinue operations with minimal disruption.DO NOT DELAYincontactingyourinsurancecompany.Givenoticequicklytoavoidpenaltyorvoidedcoverage.Refertothestepslistedaboveinmakingapropertyinsuranceclaim.

CALCULATING BUSINESS INTERRUPTION LOSSES Businessinterruptionclaimscanbecomemoredifficultandevencontentiouswhendifferencesofinterpreta-tionemergeaboutthereliabilityofprojectionsorthemeaningofpolicyprovisions.Asuccessfulclaimentailsmaneuveringthroughthegrayareasinherentinbusinessinterruption,includingfinancialprojections,con-sumerdemandandpolicyinterpretation,toreachanumberthat’sreasonable,credible,defensibleandwell supported. Thefollowingisacommonexampleofaworksheetthatcanbeusedtocalculateyourbusiness-interruptionloss:

SAMPLE BUSINESS INTERRUPTION WORKSHEET

1. GrossSales $ ______________

2. Adjustmentstogrosssales $ ______________(includesdiscountsgiven,returnsandallowances,baddebts,freight)

3. NetSales(1minus2) $ ______________

4. Otherincomethatwouldbelostif $ ______________operationswereinterrupted(includesrent,interest,servicefees)

5. TotalRevenues(3minus4) $ ______________

6. Merchandiseormaterialsconsumeda. Purchasesduringtheyear $ ______________b. Changesininventory $ ______________i. Beginninginventory $ ______________ii. Endinginventory $ ______________iii. Change(beginningminusending) $ ______________c. Total(aplusb) $ ______________

7. Grossearnings(5minus6c) $ ______________

8. Discontinuingexpenses $ ______________(includespayrollthatwouldnotcontinue,rent,heat,light,delivery,advertising,maintenancecost,etc.)

9. GrossEarningsDiscontinued $ ______________Expenses(7minus8)

AdjustGrossEarningsAfterDiscontinuedExpensesforperiodorInterruptionExpectedInsuranceNeeded: 1year:Line9*1.00= $ _____________9months:Line9*0.75= $ _____________6months:Line9*0.5= $ _____________

COMMONLYASKEDQUESTIONSCAN I MAKE TEMPORARY REPAIRS?

Beforemakinganyrepairs,getwrittenpermissionfromyourinsurancecompany.Onceyouhavethat permission,eveniftheadjusterhasnotvisitedyet,makeallnecessarytemporaryrepairssuchasboardingupwindowsandrepairingholesinthewallsorroof.Moveyourpersonalpropertytoaprotectedarea.Donotdisposeofitemsyoubelieveareatotallossuntiltheinsuranceadjusterhasinspectedthemorunlessyouareinstructedtodosobylocalofficials.Ifyoumustdisposeofdamageditems,photographthemandtakeaswatchorsample.Takephotographsbeforeyoubeginrepairsorcleanup,andkeepallofyourreceiptsfor your expenses. MakesureanyoneyouhiretomaketemporaryrepairsisproperlylicensedbytheCAContractorsStateLicenseBoard(www.cslb.ca.gov)orinthestatethebusinessislocated.

CAN I HIRE SOMEONE ELSE TO MAKE EMERGENCY REPAIRS? Usuallyyoucanhiresomeoneelsetomaketemporaryoremergencyrepairs,dependingonthecoverageyourpolicyprovides.Suchpoliciesusuallycovermaterialsandreasonablelaborexpensesfortemporary andemergencyrepairsinadditiontofinalrepairs.Getseveralestimates.Also,contactyourinsurance companytofindoutifyouwillbereimbursedforrepairsyouconductyourself.Keepallofyourreceiptsforyour expenses.

I OWN A BUSINESS. WHAT KINDS OF INSURANCE COVERAGE COULD I HAVE FOR CLAIMS MADE AGAINST ME OR MY COMPANY?

Workers’compensationclaimscanbebroughtagainstyoubyinjuredemployeesortheirfamiliesfor disabilityandlostwages.Injuredvisitorsorthoseemployeeswhoareexemptfromworkers’compensationmayhaveclaimsunderhealthinsurance,shortandlong-termdisabilityandtravelaccidentpolicies.Youmaybecoveredbycommercialgeneralliabilitypoliciesforlawsuitsbroughtagainstyouforbodilyinjury orpropertydamage.Commercialandpersonalumbrellaandexcesspoliciesmayprovideadditional coverage.

MY INSURANCE COMPANY HAS DENIED ME COVERAGE OR HAS OFFERED ME LESS THAN I THINK I SHOULD RECEIVE. WHAT CAN I DO?

Insurancecompaniesarerequiredtoacknowledgereceiptofclaims,communicatetheirdecisionsonclaimsandpayclaimsinatimelymanner.Ingeneral,insurancecompaniesshouldacknowledgereceiptof your claim within 15 days of receiving notice of your claim and should communicate decisions on claims within 40 days of receiving your claim. Payouts should occur within 30 days of your acceptance of their offer. Ifcoverageisdenied,inwholeorinpart,asktheinsurancecompanytoprovideyouwithitsreasons in writing,aswellaswhetherithasanappealsprocess.Youshouldaskforanyreportspreparedbythe insurance company in assessing your property or evaluating your claim. You may also want to seek an advanceoftheundisputedportionofyourclaim,ifyoucandosowithoutgivingupyourrightstothe disputedportion.Contactyourstatedepartmentofinsuranceifyoufeelyourclaimhasbeenwrongfullydenied.Youmaywanttoseekhelpfromanattorney,butbeawarethattheirfeeoftenwillreduceyourtotal recovery.