4 Tips to Prevent Business Catastrophes

As much as we try to prevent them, accidents do happen. An employee is injured, a fire damages your warehouse, a cyberattack leads to a data breach. Unexpected emergencies can shut down your operations for hours, days or even weeks with potentially serious impact to customer relationships and revenue. Is your company prepared to handle these types of situations?

Here are four tips to help you plan for common business catastrophes 


As Benjamin Franklin so aptly put it: “By failing to prepare, you are preparing to fail. And that certainly seems to be true when it comes to business emergencies, as studies show that more than 40% of small businesses close permanently after a disaster.  

The first step in creating an emergency plan for your business is to assess the primary risks to your business, whether that be weather, cyber or equipment related(Here’s a handyrisk assessment table from the Federal Emergency Management Agency (FEMA) that may help get you started.) 

It’s important to determine the primary goals of your plan, which should at minimum, seek to protect employees, eliminate any immediate dangers such as chemical leaks or faulty equipment and keep your business running as smoothly as possible. Be sure to address the key plan components with your staff, such as a list of employees to contact during an emergency, building evacuation policiesas well as who is responsible for managing essential functions during emergencies.    


A plan is only as strong as the people who are implementing it. Once a plan is approved by leadership, make sure to set up a chain of command which clearly lays out specific employees’ responsibilities – such as directives on shutting down equipment or production processes. Create a list of all your suppliers with contact information so they can be easily reached in times of crisis. 

Thoroughly review and rehearse your plan with crucial team members at least twice a year to keep accident prevention top of mind with employees. It’s also a good idea to provide a copy of crisis plans to all staff members. 


Based on your business’s risk assessment and crisis plan, a crucial next step is to have a conversation with your insurance agent, who can help determine what level of insurance coverage is most suitable for your business from protecting against occurrences such as equipment breakdowns, theft or natural disasters. Many businesses underestimate how much coverage they need, only to learn later that a particular disaster wasn’t covered under their policy.  


In today’s fastchanging digital world, hacking and computer viruses continue to be issues that result in not only physical and financial loss, but also emotional stress. Data that is stored electronically also faces a number of threatsfrom mechanical malfunctions and phishing to natural disasters that can damage or destroy hard drives or paper files with vital information 

That’s why it’s important to invest in cloud-based solutions, which offer secure data that’s accessible from any location. If you aren’t storing data in the cloud yet, be sure that you digitally back-up and encrypt important data frequently in a location that’s a good distance from your business headquarters. Paper documents such as contracts, licenses and corporate records can be kept in a fireproof box or bank lockbox. It’s also important to have data breach protection and remediation that protects you from identify theft. 

Rural Mutual is the third largest business insurer in Wisconsin with an extensive statewide agent network that is available to help you customize a business policy that fits your needs. 

The information provided in external website links is for general informational purposes only and does not form any recommendation or warranty by Rural Mutual Insurance Company or its affiliates.