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Disaster recovery plan
A disaster recovery plan is a set of procedures and steps to protect businesses and aid in recovery after a natural or man-made disaster.
What is a disaster recovery plan?
A disaster recovery plan (also known as a business recovery plan) is an essential document for all small businesses. It helps business owners respond effectively to a catastrophic event, safeguarding business assets and re-establishing operations as quickly as possible.
The plan should be highly detailed and practical, showing you exactly what to do after a disaster, such as a hurricane, takes place. A disaster recovery plan and business interruption insurance are crucial resources for companies in the aftermath of a disaster.
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What are the benefits of a disaster recovery plan?
Despite numerous benefits to having a disaster recovery plan, 61% of small business owners polled in a recent survey don’t have a formal business continuity plan in place. Disaster recovery planning helps businesses by:
- Minimizing damage to business property and injuries to staff after a disaster. If your property is damaged, commercial property insurance can potentially cover replacement costs.
- Ensuring continuity of computer and office operations so customer service can resume as soon as possible
- Mitigating customer defections during and after an extended business closure
- Allowing for ongoing invoicing and posting of business receivables so that firms remain solvent
- Making sure a disaster does not put your company out of business
What should a disaster recovery plan include?
Because you must address many factors in your disaster recovery planning, it’s helpful to work with a disaster recovery plan checklist. Broadly speaking, make sure your plan addresses the following elements:
Establish and equip an alternative location for your business.
Develop a plan for maintaining communications (both internally and externally) after a disaster strikes.
Ensure that technology and data backups are in place to guarantee continued operations after a crisis.
Document all key business functions (including supply chain) and take steps to maintain their integrity post-disaster.
Create a safety/evacuation plan to prevent staff injuries.
Develop a plan to test and periodically review and revise your disaster recovery document.
What role does insurance play in a disaster recovery plan?
A key part of disaster recovery planning is reviewing your business insurance to make sure you have adequate coverage for the costs of remediating a disaster.
An important insurance policy to consider is business interruption insurance. It provides cash to replace your lost revenue, normal operating expenses, and the cost of moving your business to a temporary location.
Having business interruption insurance might be the difference between your company surviving a disaster or shutting its doors permanently.
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Insureon helps small business owners compare business insurance quotes with one easy online application. Start an application today to make sure your business has the business interruption insurance it needs to weather an unexpected event.
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Updated: April 29, 2022
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