In a business context, a disaster recovery plan is a well-thought-out strategy to get your business back up and running if it has to close because of a natural or human-induced disaster. In other words, when disaster strikes, you’ll be ready to pick up the pieces.
Also known as a business recovery plan, a disaster recovery plan involves more than just purchasing insurance — though that is one critical component. A good disaster recovery plan is highly detailed and practical, clearly and concisely outlining what needs to be done to get your business back on its feet.
While there’s no way to lower the risk of a natural disaster (if only!), developing a comprehensive disaster recovery plan can limit your losses during the time you have to be closed and help you get your doors open quickly.
A good disaster recovery plan looks at what needs to be done before, during, and after a disaster in order for your business to recover as quickly as possible.
A crucial part of a disaster recovery plan is reviewing your current insurance policy.
Many small businesses may have business personal property insurance (BPP). BPP is great because it covers everything you need to run your business except the building itself, which the owner should cover. This includes equipment, inventory, and any upgrades you’ve made to the space, like custom lighting.
However, as repairs are being made and paid for by BPP, every day you’re closed, you’re losing money. That’s where business interruption insurance comes in.
Business interruption insurance (also known as business income insurance) helps cover the revenue you would have earned if you were open. It can also pay for ongoing business expenses to keep your business running.
So not only does business income insurance cover the profits you’re losing while closed, it can help pay for a temporary location to continue work while repairs are being done. In addition, it can help pay for things like property taxes, bills, and even training on new or different equipment while your primary equipment gets repaired or replaced.
No location is immune to disasters, but having a well-thought-out and organized disaster recovery plan can limit the damage and ensure your doors will open again quickly.
NEXT offers small business owners 24/7 access to manage their policies and file an insurance claim any time, day or night. In fact, most claims are resolved within 48 hours so you can focus on getting back to business.
You can start a quote, customize your options and access your certificate of insurance online immediately — in about 10 minutes.
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.