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5 disaster preparedness moves for businesses

Disaster planning business tips

I know it's a little late for all the business owners in North and South Carolina who better already be on the road or heading out soon to get out of Hurricane Florence's reach. Mea culpa.

But for the next time — and there will be a next time — here are some ways to get your business ready for any disaster.

Most of these are best practices that tax professionals and other companies already follow, but just in case you're worried you forgot something in your rush to get things done and get out, here's a quick checklist.

1. Know your risks and prepare.
While disasters can strike anytime, anywhere, some places are more prone to certain types of whacks from Mother Nature. Do you live in Tornado Alley or along a coastline that's a target for friends of Florence? Maybe wildfires are frequent hazards, or severe winter weather damage that could disrupt your business.

Once you determine the types of disasters for which you are most at risk, take steps to minimize potential damage and loss to your building and employees. This ranges from structural changes to secure your office, or working with your landlord to make such improvements, to creating plans to continue your operation at another location if you're unable to return soon after a disaster.

Being ready can help your company from joining the estimated 25 percent of businesses that, according to the Institute for Business and Home Safety, don't open again after a major disaster. Once you make your disaster action plan, keep it updated. And be sure to go over with your staff as a threat looms.

Ready.gov takes a thorough online look at disaster preparedness planning for businesses.

2. Protect your vital business records.
One of the key steps for any business to take regardless of what disaster it might face is securing records. This includes physical and digital safekeeping.

If you can't take all your critical actual paper documents with you when you evacuate, put them in a safe that's received Underwriters Laboratories (UL) certification as being resistant to fire, heat, burglary tools and torches.

Since hurricanes will bring rain and flooding, make sure those documents are in watertight containers before you lock them in the safe.

It's also time to be record redundant.

Create backup digital copies of the documents and make sure to run a system backup to a hard drive you can take with you or send them to the cloud. Do the same for critical data and programs.

In fact, keeping regularly backed-up copies in a location separate from your primary facility is a good idea even when you're not facing a potential natural disaster.

3. Understand your insurance coverage.
Your business' policy is just as important as the one that covers your personal belongings.

Review your company's policy with your insurance agent to make sure you understand your deductibles, the limits of your insurance and the nature of your coverage. There are many different types of coverage, all of which are subject to limitations and exclusions.

As with your home's preparations, take photos and/or videos of your office equipment that could be damaged during the disaster.

Internal Revenue Service Publication 584-B, Business Casualty, Disaster, and Theft Loss Workbook, can help you compile a complete listing business equipment. Having that information in writing will help you recall and prove the market value of items for insurance and casualty loss claims.

Speaking of insurance, keep your policy information and contact names and numbers handy, as well as storing copies in a safe place. Let your key employees know where they can access this information in the case you're not available to deal with an issue during the claim process.

4. Check on fiduciary bonds.
If you use a payroll service provider, ask that company if it has a fiduciary bond in place. The bond could protect you in the event of default by the payroll service provider.

5. Stay in touch.
Once the immediate danger has passed, reach out to your workforce. Being a good boss, you'll probably want to do that just to check on how they came through the disaster.

It also will help them know that you're committed to getting the business back up and them back to work as soon as you safely can.

So that you can stay in touch, make sure you have an updated list of everyone's cell phones and family contacts.

And don't forget about your customers.

As soon as practicable, reach out to your clients to let them know that you've protected the data they entrusted to you. Let them know you'll be back in business and taking care of their tax needs as quickly as you can.

Here's hoping you and your firm never have to worry about these disaster plans. But it's good to have them in place, just in case.

Shameless Plug/Update: I updated my tumblr blog Tumbling Taxes today, Sept. 23, with a post (and Hurricane Florence video) connected to this post.

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