When Disaster Strikes: The Importance of Having a Business Continuity Plan

March 05, 2021

By Michael Gonzalez of Denali International

On Feb. 16, more than 70% of the U.S. was under snow. I talked to several agents that same week who advised that the world as they knew it had come to a screeching halt due to the snow and cold weather. Some went without electricity and water for days. Some trucks and drivers were stuck in areas with no idea of when they are going to be able to get back on the road and back home. Being from Alaska and having operations in Alaska, snow and cold weather doesn’t typically slow things down but it doesn’t mean that there are not other unique challenges that come along with living here. We have just learned to operate and be prepared for snow since we are in winter for nine months out of the year. What a lot of us Alaskans were not prepared for was a giant earthquake. On Nov. 30, 2018, we had a “unique challenge” when a 7.4 magnitude earthquake hit Anchorage, causing massive damage to roads, bridges, and structures and shutting down the majority of town.


Every business should have an answer for this question: “What is your plan when something unexpected happens?” This is known as a Disaster Plan or Business Continuity Plan (BCP). According to the Federal Emergency Management Agency, 40-60% of small businesses close permanently after a major disaster. Among businesses that are closed for at least five days, 90% fail within a year.


By building a good BCP for your business, employees, and customers, it could mean fewer days that you are out of business. Resuming operations as soon as possible following a disaster should be considered a crucial part of this plan. Businesses that make the decision to develop a disaster plan ahead of a disaster are well positioned to beat the odds.


A business continuity plan (BCP) typically includes:

  • Business impact analysis: The objective of this is that it is done before a disaster occurs so that you might better understand the effects of a disaster to your business. For example, what impact will there be as a result of a certain type of disruption? How will the timing of the disruption affect business? As an example of timing, I think we will all agree that if a disaster happens in November in the industry that it will probably not be as bad as June.
  • Recovery strategies: Identify and document the resources necessary to minimize the impact of the disaster (e.g., data backups, duplicates of important records, where are your data servers located, and remote working capability).
  • Plan development: This includes but is not limited to assigning responsibilities to team members and developing workarounds for issues that might arise. For example, what is your plan if the you lose power? What is your plan if roads get shut down?
  • Testing: Regular testing of a BCP is essential. It’s one of the only ways you are going to find out if there is a hole in your plan that is preventing you from getting up and running.


Some other key things to think about:

  • Review your insurance coverage to ensure that you have the proper coverage for the disaster you could be in. Your insurance agent will be able to assist.
  • Create a communication strategy to be able to communicate to customer and clients about the state of your business. It is suggested that you go both low and high-tech. Low-tech might be posting notices outside of your business or contacting customers by phone. High-tech might look like posting updates on your social media channels and via your newsletter email blast.
  • You should have up-to-date duplicates of all your important records, contracts, and documents and keep them off-site in a safe deposit box or secured in the cloud.


In conclusion, spending the time now might feel like you are wasting your time preparing for something that might not ever happen. It has been said that for every minute you spend preparing for a disaster it will be an hour you’ll save when issues do arise. There is a lot of material online to assist with this process. If you believe your business is at a particular risk for disaster and you feel you need help planning, you might want to consider hiring a disaster recovery consultant to assist with this process.