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.
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
For many New Jersey business owners, a closely held company represents decades of work, financial investment, and personal sacrifice. Trusts in business succession planning are one of the most effective tools for protecting that value, allowing founders to control how and when the business passes to the next generation while reducing the risk of disputes, […]
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!
