Flooding is one of the most common and devastating natural disasters, posing a significant threat to small businesses. According to the Federal Emergency Management Agency (FEMA), 40% of small businesses do not reopen after a disaster, and another 25% fail within a year. The increasing frequency and severity of floods, fuelled by climate change, make it essential for small businesses to have a comprehensive flood preparedness and recovery plan. This blog post provides a detailed guide on flood preparedness and the necessary actions to take after a flood, focusing on small businesses in both Canada and the United States.
Understanding the Risks
Before diving into preparation steps, it’s crucial to understand the risks associated with flooding:
- Frequency and Severity: Floods can occur anywhere and are becoming more frequent and severe. According to the National Oceanic and Atmospheric Administration (NOAA), floods cause more than $8 billion in damages annually in the U.S.
- Types of Flooding: Coastal flooding, flash floods, and river floods each present unique challenges.
- Location: Businesses in flood-prone areas face higher risks, but even those in low-risk zones should prepare.
The Importance of a Flood Preparedness Plan
A flood preparedness plan is vital for the survival and resilience of small businesses. This plan should encompass prevention, response, and recovery strategies to minimize disruption and financial loss.
1. Assessing Flood Risk
Start by assessing your business’s flood risk. Use FEMA’s Flood Map Service Center or Canada’s Flood Hazard Information Tool to determine if your business is in a flood zone. Consider factors like:
- Proximity to bodies of water: Rivers, lakes, and coastal areas.
- Local drainage systems: Assess whether they can handle heavy rainfall.
- Historical data: Past flooding events in your area.
2. Commercial Insurance Endorsements and Recommended Coverage
Insurance is a critical component of flood preparedness. Many small businesses are under-insured, which can lead to devastating financial losses. Here’s what to consider in both Canada and the U.S.:
- Flood Insurance: Regular business insurance does not cover flood damage. Purchase a separate flood insurance policy through the National Flood Insurance Program (NFIP) in the U.S. or private insurers. In Canada, look for overland flood insurance, which is increasingly offered by major insurers.
- Business Interruption Insurance: This covers lost income and operating expenses during recovery. It’s crucial for maintaining cash flow during a business closure.
- Commercial Property Insurance Endorsements: Endorsements can extend coverage to include specific risks like sewer backups, equipment breakdown, and more.
- Review Policies Annually: Ensure your coverage limits match the current value of your assets and adjust for inflation and asset acquisition.
3. Creating an Emergency Response Plan
An emergency response plan should outline the steps to take before, during, and after a flood. Key elements include:
- Evacuation Procedures: Establish clear evacuation routes and assembly points.
- Emergency Contacts: Maintain a list of essential contacts, including employees, local emergency services, and insurance providers.
- Communication Plan: Develop a system to keep employees, customers, and suppliers informed during a flood event.
4. Safeguarding Physical Assets
Protecting your physical assets can significantly reduce flood damage. Consider the following measures:
- Elevate Electrical Systems: Raise electrical panels, sockets, and wiring above potential flood levels.
- Install Flood Barriers: Use sandbags, flood gates, or other barriers to prevent water from entering your premises.
- Secure Hazardous Materials: Store chemicals and other hazardous materials above flood levels to prevent contamination.
- Backup Data: Regularly back up critical data and store copies off-site or in the cloud.
5. Financial Preparedness
Financial resilience is crucial for surviving a flood disaster. Steps to take include:
- Emergency Fund: Maintain a reserve fund to cover immediate expenses during recovery.
- Access to Credit: Establish lines of credit with your bank before a disaster strikes.
- Documenting Assets: Keep an up-to-date inventory of all assets, including photographs and receipts, to streamline insurance claims.
6. Employee Training and Safety
Your employees are your most valuable asset. Ensure their safety and preparedness with the following:
- Regular Training: Conduct regular training sessions on flood response procedures.
- Safety Kits: Provide employees with emergency kits containing essentials like first aid supplies, flashlights, and water.
- Health and Safety Protocols: Develop protocols to protect employees from hazards like contaminated water and mold during recovery.
7. Community Collaboration
Collaboration with local businesses and community organizations can enhance your preparedness efforts:
- Local Emergency Services: Build relationships with local fire departments, police, and emergency management agencies.
- Business Continuity Networks: Join local business continuity networks to share resources and information.
- Community Resilience Programs: Participate in community resilience programs to strengthen collective preparedness.
Actions to Take After a Flood
Once the floodwaters recede, the recovery process begins. Here are the key steps to take:
1. Safety First
- Assess Safety: Ensure the building is safe before entering. Look for structural damage, gas leaks, and electrical hazards.
- Protect Yourself: Wear protective clothing, including gloves and boots, to avoid contact with contaminated water and debris.
2. Document the Damage
- Photograph Everything: Take photos and videos of all damage for insurance claims.
- Inventory Losses: Make a detailed list of damaged items, including their value and condition before the flood.
3. Contact Your Insurance Provider
- Notify Your Insurer: Contact your insurance company as soon as possible to start the claims process.
- Provide Documentation: Submit your photos, videos, and inventory lists to support your claim.
- Follow Up: Keep records of all communications and follow up regularly to ensure your claim is processed.
4. Clean Up and Disinfect
- Remove Water: Use pumps, wet vacuums, and dehumidifiers to remove standing water and dry out the building.
- Discard Contaminated Items: Dispose of items that cannot be cleaned or disinfected, such as carpeting, mattresses, and upholstered furniture.
- Clean Thoroughly: Clean and disinfect all surfaces, including walls, floors, and equipment, to prevent mold growth.
5. Restore Utilities
- Inspect Systems: Have professionals inspect electrical, plumbing, and HVAC systems before restoring utilities.
- Test Equipment: Test all equipment and machinery for functionality and safety before resuming operations.
6. Financial Recovery
- Apply for Assistance: Explore government and non-profit programs that offer financial assistance to businesses affected by floods.
- Access Credit: Use pre-established lines of credit to cover immediate expenses if necessary.
- Monitor Cash Flow: Keep a close eye on your cash flow and adjust your budget to prioritize essential expenses.
7. Communicate with Stakeholders
- Update Employees: Keep employees informed about the recovery process and their roles.
- Inform Customers: Communicate with customers about your status, including expected reopening dates.
- Engage Suppliers: Coordinate with suppliers to manage deliveries and inventory replenishment.
8. Review and Revise Your Plan
After the flood recovery process, take time to review and revise your flood preparedness plan:
- Analyze Response: Evaluate what worked well and what didn’t during the flood and recovery.
- Update Procedures: Adjust your emergency response and recovery procedures based on lessons learned.
- Train Employees: Conduct new training sessions to incorporate updated protocols.
Top 5 Most Claimed Damages for Small Businesses After Flooding
- Structural Damage
- Damage to the building’s foundation, walls, floors, and roof.
- Often the most costly and urgent to repair.
- Inventory Loss
- Damage to goods, products, raw materials, and supplies.
- Can significantly impact revenue and business continuity.
- Equipment and Machinery Damage
- Destruction of essential business equipment such as computers, manufacturing machinery, and other tools.
- Often leads to production or service disruptions.
- Electrical and Plumbing System Damage
- Water intrusion can ruin electrical wiring, outlets, and plumbing systems.
- Requires extensive repairs and can pose safety hazards.
- Furniture and Fixtures Damage
- Loss or damage to office furniture, shelving, display units, and other fixtures.
- Can affect the business’s operational capacity and aesthetics.
Top 5 Secondary Damages Seen After a Flood if Response is Too Slow
- Mold and Mildew Growth
- Prolonged exposure to moisture can lead to mold and mildew infestations.
- Health hazards and further structural damage.
- Rust and Corrosion
- Water exposure can cause rust and corrosion on metal components and machinery.
- Affects the functionality and longevity of equipment.
- Pest Infestations
- Floods can create ideal conditions for pests like rodents and insects.
- Can lead to additional health and sanitation issues.
- Warping and Swelling
- Wooden structures and materials can warp or swell due to prolonged moisture exposure.
- Compromises structural integrity and appearance.
- Deterioration of Building Materials
- Continued dampness can weaken building materials such as drywall, insulation, and flooring.
- Results in ongoing deterioration and increased repair costs.
Ensuring a prompt and thorough response to flooding can help mitigate both primary and secondary damages, preserving the business’s assets and operational capabilities.
Take away…
Flood preparedness and recovery are ongoing processes that require diligence and proactive measures. By assessing risks, securing appropriate insurance, creating comprehensive response and recovery plans, and taking immediate action after a flood, small businesses can mitigate the impact of floods and enhance their resilience. Don’t wait for a disaster to strike—start preparing today to safeguard your business’s future.
Remember, the key to surviving a flood disaster is preparation and swift action. With a well-thought-out plan in place, your small business can weather the storm and emerge stronger. Through Fortitude We Conquer.