Disaster Recovery Plans
Of the U.S. companies that are victim to a man-made or natural disaster, the Contingency Planning Research Strategic Corporation says 43% never reopen their doors and 29% are out of business within the following two years. A study by Touche Ross found that companies without a disaster recovery plan only have a 10% or less survival rate. Business owners should be seriously asking themselves whether or not they have an adequate recovery plan for disasters.
There are three crucial areas that all disaster recovery plans should cover:
Physical Resources
- The physical assets of a business, such as equipment, electronics, office furniture, and the building itself, are things that usually can’t be quickly or easily replaced if they’re damaged during a disaster. An adequate disaster recovery plan should answer the following:
- Is there at least three days’ worth of emergency supplies on hand to carry the business immediately following the disaster?
- What steps can you, should you, and will you take to protect physical assets?
- How would physical assets hold up against various disasters (e.g. flood, hurricane, tornado, fire, or earthquake)?
- Who will assess the damage to physical assets following a disaster?
- Has a list been made to prioritize the replacement of key physical assets, and what suppliers or companies should be contacted for the replacement?
- Is access available from an off-site backup system if data and electronics are damaged, and how often should backups take place?
- How will important documents and records be kept secure and protected?
- Is an alternative facility an option to resume operations if the primary location is unusable; what location and type of facility would be needed?
Human Resources
All employers know that their employees are one of their business’s most vital assets. Therefore, employee safety and the resulting personnel issues that follow a disaster should be a top priority. An adequate disaster recovery plan should answer the following:
- Have all staff been adequately instructed on the disaster recovery plan?
- How will staff find safe shelter?
- How will contact be maintained with staff during and after the disaster?
- Are current contact numbers for all staff, vendors, suppliers, and clients available at an off-site location and how will this list be maintained and updated to stay current?
- Have staff members been identified to assume mandatory or key roles should other employees not be able to resume their roles?
- Are staff members assigned to form a crisis management team?
Operation Continuity
Getting the business back up and running after the disaster is top priority. An adequate disaster recovery plan should answer the following:
- Does insurance, in particular business interruption insurance, provide adequate coverage?
- What amount of cash will be available for emergency contingency expenses?
- If the facility isn’t usable, then where should an alternative command center be located to coordinate the recovery?
- Is there an alternative list of suppliers to use in the event regular suppliers aren’t operational?
- What should be done for clients and customers during and after a disaster?
Employers might further assign specialized teams to be in charge of some of the tasks related to the above points. For example, a post disaster recovery team could manage recovery tasks like getting the business up and running quickly; an administrations team could handle areas like logistics, transportation, and emergency and survival gear; a public relations team could make public announcements and field inquires; a client/supplier communications team could advise vendors and clients of the business’s status; and an IT team could be responsible for software and hardware issues.
Remember, disasters can strike with little, if any, warning. Business owners can keep themselves off the wrong side of the statistics by being prepared and being able to get themselves up and running as soon as possible. For more on disaster recovery, please consult the FEMA Emergency Management Guide for Business and Industry. In addition, Symantec and Ponemon Institute have developed an online Data Breach Risk Calculator, helpful for assessing cyber liability and your potential exposure to data breach risk.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.
Captive Insurance Programs
Captive insurance programs are an alternative to standard insurance protection. They are not new; but they are getting a lot more attention now than they had in the past.
Captives can provide the highest quality insurance protection for its owners. By banding together to create a true sharing of risk, the shareholders of a captive can control their insurance costs and avoid the volatility of the traditional insurance industry. Additional benefits are created through the increased assurance of coverage, the stabilization of premiums, and the improved management of risk through effective loss control and claims management.
Captives were created to satisfy the need of companies to obtain casualty insurance coverage at a predictable cost. They started when companies perceived that the commercial insurance industry was not responsive to their risk needs. The goal of these business owners was to:
- Increase buying power
- Allow member companies many of the same advantages of control generally afforded to only the largest companies
In addition to the tax deductibility of premiums paid into a captive, there is also the opportunity for the members to share in the underwriting profits and investment income of a captive.
Well run, financially stable, low loss frequency companies make ideal candidates for a captive alternative. If you are wondering if a captive alternative is for you, please call Mike Regan at Regan Cleary Insurance.
At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. We are members of the National Association of Surety Bond Producers (NASBP), the professional organization for agents that also specialize in surety bonding. Give us a call today at 617-723-0700.
SCA Contracts
The DOL has sufficient funding to hire over 200 full time additional Wage & Hour Investigators. The funding was provided over the past several years by the American Reinvestment & Recovery Act (ARRA).
Timothy J. Helm, Chief for the Branch of Government Contracts Enforcement for the Wage & Hour Division of the DOL has been responsible for the hiring and training of these individuals. According to Mr. Helm and his staff, open investigations are at an all-time low as a result of the additional investigators. At the quarterly Professional Services Council (PSC) Labor Relations meetings, Mr. Helm spoke of violations following a DOL audit, mentioning that his goal is to debar contractors instead of negotiating settlements with them.
We have been encouraging contractors, as a result of the above, to ensure that all their personnel dealing with these Service Contact Act (SCA) and Davis Bacon Act (DBA) contracts have the appropriate training to handle DOL audits. If contractors have not had all their respective personnel properly trained, they should make sure that this is done as quickly as possible.
We have been coordinating Service Contract Act training programs for the PSC Association three times a year, and these will continue in 2012 in March, June and November. We have also designed a one-day Davis Bacon training program that will be held in early April 2012. The DOL Wage & Hour staff has agreed to participate in this training, as they have always done with the SCA programs.
Additionally, MARAL, LLC has been offering SCA and DBA one day training programs in Rosslyn, VA and at client locations for the past several years. Their schedule and registration procedures can be found on www.eventville.com/maral or e-mail Al Corvigno at acorvigno@marall.com.
Some contractors are reluctant to provide their employees working on SCA or DBA contracts the appropriate fringe benefits listed on their respective Wage Determinations. In lieu of providing the fringe benefits, they choose to pay a cash value. While this meets the minimum legal requirement, it actually increases the cost to both the contractors and the employees due to the taxable implications.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe benefit obligations and provides your employees with valuable benefits.