September 2019’s Hurricane Dorian Highlighted the Importance of Updating Disaster Plans
While the East Coast largely avoided Hurricane Dorian’s wrath, the strong, unpredictable storm highlighted the importance of disaster planning, particularly for small businesses. In addition to weather, businesses can be impacted by everything from earthquakes to fire to terrorism. Even the loss of electricity or internet service for a significant time period can be crippling to many companies.
Although the causes of natural disasters are out of our control, businesses can take steps to minimize the fallout. The close call with Dorian reminds companies to update disaster and business continuity plans. While the specific policies and procedures would normally be specifically tailored to the nature of your state’s business and any specific regulations that govern them, there are certain issues that all disaster plans may address:
Widespread service disruption: Businesses should prepare for a potential widespread lack of basic services within their service areas, i.e. telephone and internet services, electricity, fuel, and water, by identifying generally suitable alternative emergency facility locations and envisioning a process for and the logistics of facility relocation. When considering alternative locations for facilities, such planned geographic diversity can help employees focus upon the logistics of getting up and running in the event of an actual regional event.
Telecommunications services and technology: Business continuity plans should certainly consider how to keep technology and telecommunications systems up and running. Options to consider include planning for using multiple providers, secondary phone lines, cloud technology, temporary phone lines, and mobile telecom units.
Data protection: Plans should address the storage and protection of business and customer records, including multiple backups of digital documents and offsite storage (at least 50 miles away) of physical documents.
Communication plans: Businesses should consider and plan for alternative means of communications with customers, vendors, service providers and regulators. It may be helpful to have emergency communication protocols and even draft emergency messages already available so as to allow communications to take place quickly and efficiently.
Regulatory and compliance considerations: Businesses in some industries, such as financial firms under the oversight of the Securities and Exchange Commission, are required to adopt business continuity plans. Of course, it is imperative to understand the need for any specific requirements and ensure the plans meet them.
Insurance policies: Businesses should consider the reminder presented by Dorian’s near-miss and review their insurance policies to determine whether they may sufficiently cover disaster-related costs related to business resumption and relocation lost income, and emergency expenses. A key coverage is for business interruption, which provides coverage when the insured suffers a loss of income from a disruption of business operations.
Expense and production reductions: On both the expense and production sides, businesses should anticipate the need for and envision temporary or permanent cutbacks, including reduced production, employee layoffs and reduced costs. While such measures would obviously be unpleasant, expense and production reductions consistent with the requirements of law and the provisions of agreements may preserve liquidity and may prove to be critical for survival.
Reviewing and testing: Of course, businesses should never “set it and forget it.” Conducting employee training, performing annual plan reviews, and conducting stress tests can also increase the likelihood that your business will be ready when disaster strikes.
Scarinci Hollenbeck’s Crisis and Risk Management Group assists businesses with all aspects of emergency preparation and response, including the development and implementation of disaster response plans, internal policies and procedures, evacuation plans, and more. For assistance, we encourage you to contact one of our attorneys.
If you have questions, please contact us
If you have any questions or if you would like to discuss the matter further, please contact Scarinci Hollenbeck attorney with whom you work, at 201-806-3364.
Business Mediation: An Overview and Practical Tips
Business mediation is a confidential, voluntary process in which a neutral third party helps companies negotiate a resolution to a commercial dispute without going to trial. Because working with a mediator is very different from litigating in the courtroom, it is important to understand how commercial mediation works, when it makes sense for your dispute, […]
Top 5 Causes Leading to Construction Defect Litigation
The five most common causes of construction defect litigation are design defects, substandard materials, workmanship defects, code violations, and subsurface defects. Because these flaws can compromise a building’s integrity, functionality, or safety, they frequently lead to disputes involving multiple parties and high financial stakes. Key takeaways: What is Construction Defect Litigation? Construction litigation is complex, […]
How to Protect Your New Jersey Business When Going through a Divorce
The most effective ways to protect your business in a divorce are put in place before one begins: a prenuptial or postnuptial agreement, clean separation of business and personal finances, and divorce contingencies built into your operating or buy-sell agreements. If divorce is already underway, the priorities shift to establishing how the business is classified […]
The most common franchise disputes involve breach of contract, franchise termination and non-renewal, intellectual property rights, territorial encroachment, royalty and fee payments, franchisor support obligations, and violations of state franchise laws such as the New Jersey Franchise Practices Act. Franchisors and franchisees can often resolve these conflicts by providing written notice detailing the dispute and […]
Reputational Risk and Legal Exposure: Why New Jersey Businesses Must Manage Them Together
New Jersey businesses must manage legal and reputational risk together because modern disputes play out on two fronts at once: the legal proceeding itself and the court of public opinion, where customers, employees, investors, and business partners often reach conclusions long before a judge or jury has had the opportunity to evaluate the facts. Success […]
Eviction Is Not Always the End: Understanding Post-Possession Rent Claims in New Jersey and New York
No. An eviction does not automatically end a tenant’s obligation to pay rent. Post-eviction rent claims are common because recovering possession resolves who has the right to occupy the premises, but it does not extinguish the tenant’s contractual obligations under the lease. Whether unpaid or future rent remains owed depends on three factors: the lease’s […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
