Thursday, December 8, 2022

Right plan can help you avoid business disruptions when disaster strikes

Recently, hundreds of Batswana in the northern parts of the country have been left homeless after days of heavy rain caused widespread damage. The main road linking the north of the country with the south had to be closed for some time as the heavy rainfall left a trail of destruction in towns such as Serule, Selibe-Phikwe and Francistown.

Farmers, who have barely recovered from the drought, fear that the heavy rains could pose an added threat to their livestock, should it continue. During floods, livestock can be lost resulting in tens of thousands of Pula in lost revenue, and damage to property.

“As clean-up continues, businesses must refocus their attention on business continuity plans in preparation of future natural disasters,” advises Ronnie Tlhakanelo, a risk consultant with Aon Botswana, local insurance brokers and risk consultants.

“It is critical to have an emergency response plan that has been thought over and tailored to your business needs and location,” he says.

Aon Botswana assists organisations in developing a holistic Risk Management process that identifies potential risks that could have an impact on their business.

It is essential to provide a framework that will bolster an organisation’s resilience and its ability to respond during floods and other disasters in a manner that will safeguard the interests of its key stakeholders, reputation, brand and value creating activities.

It normally takes weeks if not months to clean up after a flood, adding to costs and stress, and reducing income earning potential for businesses.

A business may have to close for an extended period of time and it could take several weeks or months for business to return to normal and customers may take their business elsewhere.

It is during this time that a well thought out plan will ensure the organisation returns to normalcy within a reasonable time.

There are multiple dimensions or levels of preparedness and several key points that should drive all disaster planning, but most importantly, organisations must test their plans regularly to gauge the readiness of their employees, and consequently, the effectiveness of the plan.

Tlhakanelo says that even though plans are great, implementation is vital. Everyone has to know what is expected of them should disaster strike.

“Don’t underestimate the value of training and exercises. Evaluate your plans before anything happens. Disaster planning should not just be about fulfilling policies or requirements.

Organisations must actually train and prepare everyone involved. Since managers have to lead through the incident, they will draw from the techniques and tools learned during training exercises,” he elaborates.

During or after floods, ensure key decision makers for emergency handling and insurance are on site as soon as possible.

Also make sure that contacts of all key personnel and service providers such as insurers and any emergency response civil authority establishments are readily available.

You also have to confirm that emergency and temporary activities such relocation of production to temporary facilities is underway.

For business Interruption losses, make sure that a system has been established to identify and capture all loss-related costs that will be subject to examination by the insurer’s assessors, and will form the basis of the eventual insurance claim presentation.

All the pertinent accounting information required for substantiating the resultant business interruption insurance claim must be in place, otherwise it may take a while for your claim to be processed if the information is not readily available or is missing.

Businesses can lose revenue due to lost production time as well as intangible costs, such as effects of floods on the health of employees.

It is therefore vital for both the employers and workers to prepare in advance for anticipated response activities as to prevent work-related injuries and illnesses once clean-up begins.

Whether buildings are within a flood prone area or not, it is important to remain vigilant regarding the Department of Meteorology Services’ weather alerts.

Businesses should also encourage employees to keep an emergency ‘flood kit’ in their homes.

This kit should contain vital documents such as personal papers, insurance policy documents, emergency contact numbers, torches, a first-aid kit, blankets, antiseptic gels, and rubber gloves.
As we continue to experience the effect of global warming, flooding is becoming an increasingly expensive and devastating risk.

“Talk with your risk consultant to understand and manage your exposures,” urges Ronnie.

“It’s never too late to assess your policy and to check that you have the right insurance covers in place, at the right price, coupled with professional advice to make sure your hard earned assets are covered so that your business remains operational,” he concludes.

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