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Of the U.S. companies that are victim to a man-made or natural disaster, the Contingency Planning Research Strategic Corporation says 43% never reopen their doors and 29% are out of business within the following two years. A study by Touche Ross found that companies without a disaster recovery plan only have a 10% or less survival rate.

Business owners should be seriously asking themselves whether or not they have an adequate recovery plan for disasters. There are three crucial areas that all disaster recovery plans should cover:

1. Physical Resources

Of course, the physical assets of a business, such as equipment, electronics, office furniture, and the building itself, are things that usually can't be quickly or easily replaced if they're damaged during a disaster. The following are questions that an adequate disaster recovery plan should answer:

• Are there at least three days worth of emergency supplies on hand to carry the business immediately following the disaster?
• What steps can you, should you, and will you take to protect physical assets?
• How would physical assets hold up against various disasters - flood, hurricane, tornado, fire, earthquake?
• Who will assess the damage to physical assets following a disaster?
• Has a list been made to prioritize the replacement of key physical assets and what suppliers or companies should be contacted for the replacement?
• Is access available from an off-site backup system if data and electronics are damaged and how often should backups take place?
• How will important documents and records be kept secure and protected?
• Is an alternative facility an option to resume operations if the primary location is unusable and what location and type of facility would be needed?

2. Human Resources

All employers know that their employees are one of their business's most vital assets. Therefore, employee safety and the resulting personnel issues that follow a disaster should be a top priority. The following are questions that an adequate disaster recovery plan should answer:

• Have all staff been adequately instructed on the disaster recovery plan?
• How will staff find safe shelter?
• How will contact be maintained with staff during and after the disaster?
• Are current contact numbers for all staff, vendors, suppliers, and clients available at an off-site location and how will this list be maintained and updated to stay current?
• Have staff members been identified to assume mandatory or key roles should other employees not be able to resume their roles?
• Are staff members assigned to form a crisis management team?

3. Operation Continuity

This component is about getting the business back up and running after the disaster. The following are questions that an adequate disaster recovery plan should answer:

• Does insurance, in particular business interruption insurance, provide adequate coverage?
• What amount of cash will be available for emergency contingency expenses?
• If the facility isn't usable, then where should an alternative command center be located to coordinate the recovery?
• Is there an alternative list of suppliers to use in the event regular suppliers aren't operational?
• What should be done for clients and customers during and after a disaster?

If you operate from home or run a small product business, consider whether specialized coverage applies to your situation, such as Home-Based Natural Ingredient Lotion Insurance or Bed Bug Infestation Recovery Insurance.

Employers might further assign specialized teams to be in charge of some of the tasks related to the above points. For example, a post disaster recovery team could manage recovery tasks like getting the business up and running quickly; an administrations team could handle areas like logistics, transportation, and emergency and survival gear; a public relations team could make public announcements and field inquiries; a client/supplier communications team could advise vendors and clients of the business's status; and an IT team could be responsible for software and hardware issues.

Remember, disasters can strike with little, if any, warning. Business owners can keep themselves off the wrong side of the statistics by being prepared and being able to get themselves up and running as soon as possible. If you need help reviewing coverage options, talk to an agent.

Frequently Asked Questions

What is the first thing I should do after a disaster?

Ensure employee safety, account for staff, and secure critical assets before beginning recovery steps.

How often should I back up business data?

Backups should be regular and frequent enough to limit data loss—many businesses use daily backups and off-site storage.

Does business interruption insurance cover all disaster losses?

Business interruption insurance can cover lost income and certain expenses, but coverage limits and exclusions vary by policy, so review your policy details.

All too many employers become entangled in costly litigation after making simple, avoidable mistakes when terminating an employee. Even with careful steps, there is no guaranteed way to prevent every claim, but good practices can greatly reduce risk.

Following proper procedures and avoiding common errors will improve your chances of defending a termination. For employers considering risk-transfer options, review Wrongful Termination Insurance to understand available coverages.

Common termination mistakes

1. 1. Not documenting sufficiently. The reason for a termination can look superficial or groundless without detailed documentation. Record all problems with performance or attendance, including dates, examples, and supporting evidence.

   For alleged misconduct, conduct an unbiased, thorough investigation and keep contemporaneous notes that describe findings and sources of information.

2. 2. Not ensuring performance evaluations are accurate. Supervisors should be trained and encouraged to give fair, honest, and accurate appraisals.

   If reviews say performance was adequate and the employee is later terminated for poor performance, that inconsistency can lead to disputes. Supervisors sometimes give unmerited positive ratings to avoid confrontation; document coaching, warnings, and measurable goals to avoid mixed signals.

3. 3. Not spelling out human resources procedures and policies. Terminations should follow federal and state law and your own written policies.

   An employee handbook that clearly explains performance expectations, misconduct definitions, and consequences strengthens your position if a termination is challenged.

4. 4. Not giving an employee notice of termination. While notice is not required in every jurisdiction, providing clear notice often reduces misunderstanding and the risk that an employee will attribute their termination to unrelated issues.

   If you opt not to give notice, be prepared to demonstrate that the employee knew the standards and that repeat infractions would lead to termination.

5. 5. Not providing just cause. Although many employees are at-will, do not assume at-will status shields every termination.

   Base terminations on objective, documented reasons and be mindful of protected classes such as sex, age, race, disability, and religion when making decisions.

Organize documentation in chronological order to show a pattern and a credible foundation for termination decisions.

For policies and coverage that relate specifically to separation events, see Termination of Work Coverage. For guidance tied to hiring and screening processes that can prevent later disputes, review Hiring (Insurance).

If you want help applying this to your business or reviewing options, talk to an agent about appropriate protections and best practices.

Frequently Asked Questions

What records should I keep when managing performance issues?

Keep dated notes of incidents, written warnings, performance plans, investigations, and any supporting emails or documents to show progressive steps taken.

Is notice of termination required?

Notice requirements depend on jurisdiction and the employment agreement; providing notice is often recommended to reduce misunderstandings even if not legally required.

Can an at-will employee be terminated for any reason?

At-will status allows termination without cause in many cases, but employers should avoid actions that could be perceived as discriminatory or retaliatory and should document legitimate reasons.