Natural disaster resilience critical for businesses

While we might not yet have the power to accurately forecast natural disasters, what is certain is that they are a reality that many Australians have to face head on.

The National Strategy for Disaster Resilience recognises this, and outlines several key points that represent the fundamental principles of a disaster resilient Australia.

Among these is the critical message that disasters will happen, and that governments, businesses, and other organisations all have a role to play in increasing their resilience to these events.

Obviously, it is in no one's power to stop extreme weather from occurring. What businesses can control to a certain extent is how much damage they suffer and how they recover from a disaster.

The Insurance Council of Australia (ICA) advises businesses that regardless of their size, there are basic steps which all companies can take to improve their resilience to extreme weather events.

In its consumer tips for increasing business resilience to extreme weather, the ICA suggests that businesses nominate a company officer or director to be in charge of risk management and continuity planning.

This person should develop a comprehensive vision of vulnerabilities and requirements in order to make "robust continuity plans".

This process starts with an inventory of current assets and resources, and of critical business functions. Which functions are critical for the company to operate? Which assets do these critical functions rely on?

Next, businesses need to determine what hazards could impact on these assets, and how long the company could operate without each critical function.

With a picture of the risks, the next question is what protections are in place. Is the business insurance policy that you currently have adequate, including cover for business interruption?

If not, it is highly advisable to talk to an insurance professional about setting in place a comprehensive policy that supports the resiliency of the business to recover from an unexpected event.