When Disaster Strikes ….

By Brent W. Huber and Brandi Bennett

If the past year has taught us anything, it's that disasters will strike. From the tornados that ravaged the southern and central United States, to the heavy rains and disastrous flooding that enveloped many parts of the country earlier this year, to the tsunami and ensuing nuclear catastrophe in Japan, it is clear that disasters do not discriminate. Whether it's a natural disaster that impacts millions of people, or an explosion, flood or fire that may affect only one business, a disaster could happen anywhere, anytime, to any business. If a disaster were to strike your business tomorrow, would you know what to do or who to call?

There are a multitude of things that businesses can do to prepare themselves for a disaster if they know its coming. But once a disaster has already struck, many business owners are left in limbo, surveying the oftentimes devastating damage to the businesses they have worked so hard to build and wondering what to do next. Decisions need to be made, and competent legal counsel should be retained. After a major loss, businesses must consider whether to make claims under insurance policies, and which types of policies, how to document losses, how to address public relations and media issues, how to continue business operations and minimize business interruption losses, examine potential environmental impacts, how comply with local, state, and national directives regarding disaster recovery, and among other things, protect against third-party liabilities. These issues should be addressed prior to, during, and after the disaster and ensuing loss. Having a carefully thought out risk management plan in place is especially important for logistics businesses that can't afford to have significant delays or complications in getting their businesses back up and running after a disaster.

There are also a number of resources available to help businesses get back on their feet after a disaster. For example, following every federally-declared disaster, the Federal Emergency Management Agency ("FEMA") is directed, subject to guidelines set forth by the Stafford Act, to render aid to disaster victims by distributing financial resources to worthy candidates. However, the application process can be tedious and oftentimes complicated, and aid is not guaranteed simply because a disaster-stricken business applies for it. Businesses may also be able to make claims under existing insurance policies, but this too can be a complex, long and drawn out process.

The bottom line is that knowing what to do (and what not to do) in the event of a disaster or other loss is critical if you are to preserve, protect, and rebuild your business. Accordingly, taking immediate steps today to work with your legal counsel to build the right risk management team is one practical step you can take to protect your business before the next disaster strikes.

This article does not necessarily represent the views of Ice Miller LLP or its clients and is not intended to constitute legal advice. Brent Huber brent.huber@icemeriller.com and Brandi Bennett brandi.bennett@icemiller.com are members of Ice Miller LLP's insurance recovery practice group and work out of the firm's Indianapolis office.

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