Three in five businesses that suffer a major disaster never recover. They go out of business or are sold. Is your agency sufficiently prepared to survive a disastrous event? Jack Fries helps you to ensure that you'll remain open should the worst happen.
An insurance agency faces many of the same dangers as other businesses, such as flood, tornado, hurricane, and fire. However, an agency has other uninsured — and sometimes uninsurable — losses that could seriously affect their ability to remain healthy. Take for example the loss of key employee(s); loss of a major company relationship; excessive price increases by the agent's main company; loss of large commission customer(s), etc. Any of these examples could drastically impact the viability and survival of an agency.
In order to prepare for potential losses, an agency must consider adopting the five-step process of disaster elimination: Assessment, Planning, Implementation, Testing, and Documentation.
Assessment: The agency management team must brainstorm and list all the potential losses that could occur. These potential losses should be graded 1-10, 10 being the most disastrous and 1 having the least impact on the agency. In assessing the impact on the agency, likelihood, financial impact, and recovery time should be addressed.
Planning: Once the assessment is accomplished, it's time to begin to formulate a plan of action. The plan should include both steps to prevent the loss and remedies to take if the loss occurs. Look both internally and externally for assistance in the planning process. The steps to be taken should be included in the agency's business plan.
Implementation: Once the plan is in place, it must be acted on. Who is responsible for what and when will it be implemented? What steps must be taken now to insure the positive outcome if the disaster occurs? Who will be accountable for taking those steps and to whom will they report? By what date will the plan be implemented and what dates should the plan be revisited?
Testing: Let's say, for example, that a computer crash is one of the disasters that you want to address. Data recovery is of prime importance. It's critical that the back-up media be tested regularly to insure that it'll be available when needed. I hear horror story after horror story from agents who suffer a loss by virus or mechanical breakdown and find that their back up is either corrupted or unavailable when it's time to reinstall.
Documentation: When the plan is completed, put the details of who, what, when, and where in writing. Keep one copy of the written plan/procedures in the office, one copy on the computer system, and one copy off premises. Everyone in the office should know where the written plan is located. A review of the plan should be conducted semi annually.
Nothing is foolproof. But by implementing these five steps, an agency should be able to either prevent a disastrous loss, or at least, mitigate the circumstances surrounding it.