There are enough headlines about the global economic crisis to keep business owners on edge – so I don’t really want to add to that general feeling of anxiety. I feel, however, that I should refer readers to a recent newsletter article on disaster recovery written by my colleague, Keith Porter, Manager of Commercial Lines for Cowan.

While no one wants to think about getting that phone call at 3 a.m. from the fire department telling them their place of business is up in flames – unfortunately it can happen. So it’s important business owners protect themselves in the best way possible.

In his article, Keith recommends a two-pronged approach:

1) A comprehensive insurance program - The first step would be to review your insurance program with your broker to ensure there aren’t any gaps or deficiencies.

Common gaps or deficiencies include low limits of insurance (on buildings, equipment, stock or similar property); coverage on buildings insured for Actual Cash Value (depreciated value) instead of Replacement Cost; and lack of Business Interruption Insurance or limit of insurance is too low.

2) A disaster recovery plan -The second part of this strategy takes some time and planning. It will be worth it, however, should your business suffer a loss. We suggest that if you do not have a plan, to start by listing possible disasters, and then list the steps you would follow in response.

Points to consider:

• How will customers and existing obligations be handled?
• Temporary shipping options – will you have product shipped directly from the supplier? Or will you establish a reciprocal service/supply agreement with another company?
• How will you get the damaged location up and running as soon as possible?
• How will you retain key employees during this downtime?

For more on disaster recovery plans, click here to read the full article.