2 in 3 Small Businesses Lack a Written Disaster Recovery Plan

Nationwide's annual Small Business Indicator survey revealed that a majority (68 percent) of small-business owners don’t have a written disaster recovery plan — even though about half (49 percent) said it would take their business at least three months to recover from a natural disaster.

The survey was conducted by Harris Poll on behalf of Nationwide from June 10-23 among 502 U.S. small-business owners with fewer than 300 employees. The survey found that:

  • 71 percent of small-business owners don’t have business interruption insurance, which can be vital to survival since an estimated 25 percent of businesses never reopen following a major disaster
  • 21 percent of small-business owners without a written disaster plan said they don’t have one because it’s not a high priority for them
  • 22 percent of small-business owners have already been impacted by a natural disaster

Disaster recovery plans are an essential preparation tool for small-business owners, especially as severe weather is on the rise in the U.S.

Most policyholders do not understand that business interruption does not apply if there was no direct physical loss to their covered property. For instance, if a major storm impacts an area and power is out for an extended period of time and there is no direct physical loss to the policyholder’s business, there is no coverage for the period of time the business is closed due to the interruption of power. The agent and policyholder should know that there are companies that offer coverage for these types of situations.

Most small-business owners are not well prepared for natural catastrophes. A majority (68 percent) of small-business owners don’t have a written disaster recovery plan — even though nearly half of those surveyed said it would take their business at least three months to recover from a natural disaster.

Of the small-business owners that indicated they did not have a disaster recovery plan for their business, 68 percent also indicated they do have a family evacuation plan at home. If a business owner feels that a disaster plan is important enough for their family and the protection of their family, they should have that same concern for the safety and health and well-being of their employees, as those employees depend on that business to support their families.

Disaster can strike at any moment, but a little preparation can go a long way to keep your small-business up and running when it does.

For tips on creating a disaster recovery plan give Design Restoration a call to ensure you have a plan in place.

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