RICHMOND, Va. (CBS19 NEWS) -- Natural disasters can occur at any time and take a huge toll on communities affected by them.
The Virginia State Corporation Commission's Bureau of Insurance is urging businesses to plan now so a disaster doesn't sidetrack plans and projections.
The Federal Emergency Management Agency says an estimated 40 percent of businesses do not reopen following a disaster and another 25 percent fail within one year after one.
The SCC says even disasters that are far away can impact businesses, especially small businesses, by disrupting supply chains and communications.
Smaller businesses are especially vulnerable because they have access to fewer resources, have fewer locations where they operate, and fewer employees to help them get back up and running.
The bureau says small businesses need to review their insurance coverage regularly and adjust it as needed when considering the needs, including the possibility of a natural disaster.
Owners need to know what their policies cover and how much they will need to make repairs and pay creditors and employees in the event of a disaster causing disruptions.
"How you plan for and deal with disasters can determine whether your business survives," said Virginia Insurance Commissioner Scott White. "Having the right insurance coverage and keeping it updated regularly is a must when preparing for the unexpected."
According to a release, standard business insurance policies usually do not cover damage from certain types of disasters, such as floods or earthquakes, which means a business may need separate coverage.
Owners need to see if their business is located in an area at risk of flooding to help determine if they will buy that type of coverage.
Businesses may also need to purchase separate automobile insurance for cars and vehicles because standard policies cover only real property.
Some owners may also want to consider getting business interruption insurance, which will cover the loss of income that a business can suffer following a disaster.
The SCC has several other suggestions that may help a business recover should it be affected by a disaster.
Owners should develop a business continuity plan and practice it with employees, including contact information, backup vendors or suppliers, and a temporary relocation site if possible.
They should also come up with a system for communications with employees and procedures for work processes and payroll, especially if employees are working from different locations and critical business services like Internet may not be working normally due to impacts of the disaster.
It is advised to have disaster provisions at the workplace, including evacuation maps and a working radio to hear any instructions from local authorities, and also store in a safe place important records an insurance provider will need to see after the emergency.
Personal and company data should be backed up regularly to help prevent information loss during a disaster.
After a disaster impacts a business, the owner should contact their insurance agent immediately to ask what information will be needed to file a claim.
For more information, call Consumer Services Section of the Bureau of Insurance Property and Casualty Division at (877) 310-6560 or click on the link in the Related Links box.