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How to develop an emergency response plan for your business

concerned small business owner

Nearly every business has felt COVID-19’s impact, leaving many companies struggling to remain solvent. According to FEMA, more than 40% of businesses never reopen after a disaster – and 90% of small companies go under if they can’t reopen within five days.

The outlook is grim for businesses caught unprepared, underscoring the need to develop an emergency response plan (ERP). As devastating as it is, companies should recognize the opportunity the coronavirus crisis presents to evaluate their plans and implement strategies to protect their businesses, employees and customers the next time disaster strikes.

What is an emergency response plan?

An emergency response plan is a set of guidelines for businesses to follow during disasters. A good ERP not only details actions businesses will take in the event of an emergency, it also helps them prevent catastrophe, prepare for prolonged shutdowns and return to normal operations post-disaster.

Why businesses need emergency response plans

Emergency response plans outline steps a business will take to maintain continuity and protect its employees and customers in response to various types of emergencies, including:

  • Pandemics
  • Fires
  • Earthquakes
  • Hurricanes
  • Tornadoes
  • Floods
  • Hazardous material spills
  • Wildfires
  • Blizzards
  • Security breaches
  • Terrorist and active shooter threats

Some emergencies demand immediate response, so it’s critical for businesses to train employees and practice policies so they can prevent damages and casualties. Others afford businesses more time to respond, yet still require swift action to avoid financial and other losses. In such cases, an ERP removes the need to make crucial demands on the fly and enables businesses to execute predetermined measures to protect its people and its finances.

Disaster response planning is only part of the process. When companies take the time to develop emergency response plans, they’re able to discover existing vulnerabilities that could leave them liable for legal damages, penalties and fines. Proper planning, then, helps businesses assess and mitigate risks before they become emergencies.

Emergency response plans reduce the risk of mistakes, and in doing so they save lives, time, money and businesses. Companies that do not have an emergency response plan would be wise to implement one now; those that already have one should review it to ensure it adequately prepares the business to survive disaster.

Why now is the right time to develop an emergency response plan

The coronavirus crisis has forced businesses to enact unprecedented emergency measures, quickly adapt to a remote workforce, and identify creative solutions to maintain operational continuity. In doing so, many have undoubtedly discovered inadequacies in their plans – or that lack of emergency planning has jeopardized or even damaged their businesses.

Now is a good time to develop or bolster emergency response plans because:

  • Disaster response is fresh on everyone’s minds
  • Recently discovered vulnerabilities can be addressed instead of forgotten
  • Many businesses and employees are experiencing downtime, granting the opportunity to focus on ERP development and to maintain employment opportunities for top talent

Developing an emergency response plan isn’t just a trendy movement inspired by current events, it’s an essential process for many companies. In fact, FEMA states that 20% of larger companies spend ten days each month on disaster planning. Along with COVID-19’s devastating impact, that should serve as a wake-up call to businesses that have not taken the time to adequately prepare.

 

man working from home

How to develop a business emergency response plan

Emergency response plans are comprised of several key components, each essential to ensuring swift and decisive action in the event of disaster. Here’s what should be included in a good emergency response plan.

Objectives

Business leaders should establish clear objectives for their emergency response plan. Each component of the plan can then be evaluated to ensure it meets those objectives. Example objectives include:

  • Identifying and addressing risks and vulnerabilities
  • Establishing disaster response teams
  • Limiting the financial impact of disaster
  • Protecting employee and customer safety in emergency situations
  • Maintaining business continuity during a disaster
  • Transitioning to normal operations post-disaster

Though these examples are broad, they can serve as a starting point for developing detailed and specific objectives tailored to individual businesses.

Regulation compliance

Many industries must comply with local, state and federal regulations. Thus, regulation compliance should be integrated into emergency response plans to avoid potential fines and legal liabilities if a disaster occurs. Examples include:

  • Data security
  • Chemical, hazardous waste and explosives storage and handling
  • Fire prevention
  • Emergency egress
  • First aid and medical resources
  • Machine safety

Businesses can start by consulting Occupational Safety and Health Administration (OSHA) regulations. They should also look into local and state laws as well as industry-specific regulations to ensure they are not only in compliance, but also following best and recommended practices.

Risk analysis

Businesses should evaluate how likely they are to be impacted by various disaster scenarios. This process helps companies identify potential hazards, determine risk levels and divert resources to areas of need.

For example, a company that operates exclusively in the Midwest probably doesn’t need to invest as much effort into hurricane response as it does flood response. Chemical manufacturers face a greater probability of a hazardous waste spill emergency than graphic design firms.

That doesn’t mean businesses shouldn’t prepare for all disasters, but it’s a good idea to focus efforts on planning for scenarios they are most likely to face.

Risk mitigation

Once risks are identified, businesses should audit their current policies, practices and facilities to identify existing vulnerabilities. Emergency response plans can outline immediate actions businesses must take to mitigate potential risks before they become emergencies.

For example, cloud and off-site data backup procedures can be established if they do not already exist. Insurance policies can be reviewed to ensure they provide ample coverage for all potential disasters. Security and fire prevention systems can be upgraded, and network security can be bolstered.

Identifying and mitigating risks now can help businesses avoid disasters and limit damages later.

Business impact analysis

Emergency response plans should also analyze the impact various disasters could have on businesses. Though it can be impossible to predict precise outcomes, planning for different types of emergencies and their durations helps prepare businesses to weather the storm. Companies should evaluate potential:

  • Lost revenue
  • Additional expenses to maintain operations
  • Supply and shipping delays and cancellations
  • Customer grievances
  • Insurance deductibles
  • Fines and penalties related to regulations and existing contracts

Gaining a firm grasp of the potential ramifications of any given disaster enables businesses to project losses and, ideally, build up emergency funds so they can endure.

 

emergency response team meeting

Emergency response teams

Companies should list emergency response team members, their roles and their contact information in their emergency response plans. There is no one right way to organize an emergency response team: some businesses might select one person to coordinate all activities, others might designate a committee.

Another approach is to divide responsibilities between emergency response groups. For example, one team might handle crisis response, another might spearhead company-wide communications and yet another might be tasked with maintaining business continuity during the crisis.

Emergency response procedures

Emergency response plans should detail specific procedures and which personnel are responsible for executing them. Good plans outline situational, crisis-dependent actions. For example, a single plan might have different procedures for:

  • Security breaches, data protection and recovery
  • Pandemics, remote working and business closures
  • Fires and evacuations
  • Tornadoes and severe weather sheltering
  • Terrorism, bomb threats, active shooters and lockdowns
  • Hazardous waste and chemical spills
  • Machinery, motor vehicle accidents and medical emergencies

Emergency response procedures should cover every potential hazard and risk, and they should focus on:

  • Protecting customer and employee safety
  • Protecting business property
  • Protecting the public
  • Protecting business and customer financial and data interests
  • Maintaining business continuity and customer service
  • Employee assistance and support
  • Returning to normal operations post-disaster

Special consideration must be given to people with disabilities and other circumstances to ensure all employees and customers are accounted for. In addition, emergency response plans should outline communication procedures during disasters.

Contact information for emergency response agencies such as police and fire departments as well as contractors such as hazardous waste cleanup agencies can be included in plans. It’s also a good idea for businesses to plan for contingencies in the event certain actions cannot be taken. For example, if tornado response dictates that employees must gather in the cafeteria, a secondary location should be included in case the cafeteria is under construction or impacted by the storm.

Employee and emergency response team training

Emergency response plans should detail training programs so every employee and response team member knows exactly what to do during emergencies. Training can be conducted in-house; or, companies can hire outside agencies that specialize in disaster preparation to deliver training programs on-site.

Companies can create emergency procedure checklists and handbooks (or add them to their existing employee handbooks) so there is no ambiguity. Plans should also establish scheduled training programs and practice drills to ensure everyone is on the same page and prepared to act fast during an emergency.

Improvement strategy

Emergency response plans are living documents that must evolve with new technologies, threats, capabilities and procedures. Thus, a good emergency response plan should detail how the business will continually evaluate and improve its strategy.

One approach is to hold regularly scheduled emergency response team meetings that address the latest changes, analyze potential vulnerabilities and recommend revisions. It’s also a good idea for teams to gather after emergencies that did not impact them to evaluate how well the business would have responded in a similar situation. Revision histories should be documented, and each new iteration should be distributed to all employees so everyone is working from the latest version.

Emergency response plan resources

The following resources can help business develop and execute comprehensive emergency response plans that protect their companies, customers and employees.

Ready.gov

Sponsored by the Dept. of Homeland Security, this free resource offers detailed information about what to include in a business emergency response plan, how to assess and mitigate risk and how to conduct a business impact analysis. It also includes links to additional resources for pre-incident planning, protective actions for life safety, firefighting, medical response, hazardous materials and workplace violence. Businesses can download Ready.gov’s Emergency Response Plan template and customize it to create their own.

FEMA

FEMA maintains a list of emergency preparedness resources to help businesses plan for and mitigate potential hazards. The page includes a guide for helping small businesses prepare for emergencies, a business continuity plan, disaster protection cost analysis, and worksheets for inventory, emergency supplies, resource requirements and insurance coverage. Businesses will also find helpful case studies that illustrate the impact of disaster and the necessity of a sound emergency response plan.

CDC

In addition to a general overview of emergency preparedness, the CDC offers links to emergency management for business and industry, the OSHA evacuation plans and procedures eTool, fire and emergency evacuation drills and protective actions during hazardous material emergencies.

Small Business Administration

The SBA offers checklists for dealing with various emergencies, from winter weather and hurricanes to earthquakes, floods and cyber security. Businesses can also learn about the SBA’s disaster relief programs, which offer financial assistance and economic injury loans.

OSHA

OSHA’s emergency preparedness and response page lists general preparation resources plus specific guidelines for disasters ranging from heatwaves and lightning to tornadoes and floods. It also covers biological diseases, toxins, chemicals and nuclear threats. Businesses can study the site to find updated rules and regulations to help them comply with the law. One excellent resource: OSHA’s Principal Emergency Response and Preparedness publication.

U.S. Chamber of Commerce Foundation

The foundation offers preparedness tips plus a whole host of emergency planning resources businesses can follow to bolster their emergency response plans. The page features checklists for emergency planning by hazard, guides for reviewing insurance coverage, how to file a claim, crisis communication, employee assistance and other information that can assist businesses with planning. The foundation also offers a Small Business Disaster Preparedness Quick Guide.

Though it’s difficult – and even impossible – to predict when emergencies will occur, a strategic emergency response plan can help businesses mitigate risk, limit losses and protect their employees and customers. Though it takes time and money, it’s well worth the investment because ultimately, comprehensive planning saves companies money, protects livelihoods and even saves lives when disaster strikes.

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