Use your experiences from other "close calls" to be better prepared

2020 was a rough year:

• Record wildfires through much of the Western US
• Above average tornado activity
• Two severe derecho events, one in the Midwest (making the list of billion-dollar events for 2020, second only to Hurricane Laura)
• By the start of December 2020, the year was the most active Hurricane Season in the Atlantic, with 29 tropical or subtropical cyclones, 28 named storms, 12 hurricanes, and 5 major hurricanes
• And there's been so many more natural disasters since then, all while we were dealing with the Covid-19 pandemic. 2023 had almost double the number of severe multi-billion dollar storms in the US than the previous 2 years.

Experts thought that natural disasters including floods, landslides, mudslides and earthquakes would become more common, and they were right. Our need to be prepared is greater than ever because the impacts of these disasters are huge with:

• Lives lost
• Children orphaned
• Homes destroyed
• Businesses ruined and rendered bankrupt
• Governments struggling to maintain a sense of order
• Food insecurity for all or parts of the population

Being prepared doesn't start with being complacent.

Now is not the time to stick your head in the sand, think you're safe and that preparations can be done later. Maybe earthquakes, floods and mudslides aren't common for your area, but what about severe snowstorms that cause highways to be closed for days, or hurricanes that wreak havoc on homes and businesses? How about the power outages and black-outs that happen with ice storms, high winds and wildfires? Yes, these are also natural disasters. Disaster being the key word here.

Being prepared means being ready to execute a response.

Any or all of these events could have disastrous effects on your business and livelihood; particularly if you're not prepared. Smart businesses are ready. They pay attention to current events and read the articles about the effects the rain, snow, mud, ice, and wind are having on the bottom lines of their competitors. These businesses have likely done a Threat Risk Assessment (TRA) and know how these disasters will affect them. They've also done a Business Impact Analysis (BIA) to further determine how this will affect their bottom line and ability to keep operations running successfully.

Furthermore, these forward-thinking companies have taken the next step to work with leading experts like KingsBridge to develop a Business Continuity Plan (BCP) and introduced a BCP software such as SHIELD to their employees - giving everyone 24/7 access to the BCP should it be required.

These prepared companies have made the right choice to be ready for whatever is coming. The signs are all there - disasters can strike any time, anywhere. No one is safe, regardless of socio-economic status or location.

The next question comes down to you. Are you prepared? Have you paid attention to what is going on around you, taken the steps necessary to be ready for the future, prepared as one of the companies that will survive when disaster strikes? For your sake, we hope so. Your employees, customers and suppliers do too.

More specifically - BCP and Hurricane Matthew

Back in 2016, Hurricane Matthew (a category 5 hurricane that hit the Western Atlantic for nearly two weeks), was an unwelcome reminder of the importance of business continuity planning and preparedness. In any disaster, there are many lessons to learn for all persons and organizations involved. Here we look at Hurricane Matthew to highlight some lessons we can all take away to enhance business continuity planning - not just hurricanes, but incidents of any kind.

Effects

For those who didn’t follow Hurricane Matthew, its effects were great and widespread. Wind gusts up to 107 mph were measured at Cape Canaveral, Florida, and water levels rose up to eight feet above normal levels as a result of the storm surge. In addition, some areas reported up to 14 inches of rainfall, increasing flood risks and impacts miles from the coastline.

It is therefore no surprise that directly inside Hurricane Matthew's impact zone, many immediate effects might inhibit business operations:

• Roads and bridges washed out, affecting staff, goods transport, and more
• Buildings flooded - these could be businesses or the homes of employees
• Downed power and telephone lines can be widespread and affect businesses and their nearby alternate sites
• Fallen trees could damage buildings and vehicles, close roads and more
• Flight cancellations can interrupt staff travel or transport of products
• Trains may be held on tracks, routes interrupted and delivery or pick-up dates delayed

Business Impacts

These are all impacts that businesses have had to face during, and after, Hurricane Matthew. If you are not directly within the impact zone, you might be wondering “How does this affect my business?”. Supply chain disruptions can drastically affect businesses whose materials and supplies come from the east coast. Additionally, businesses with multiple locations may have to assist in the recovery of those within the impact zone. This can result in staffing shortages, overtime and increased stress. Planning for how to assist other locations is important and solutions can range from moving call-centre volume in advance of a disaster, coordinating additional shift rotations, hiring additional temporary staff, and more.

But what about those businesses affected? We know Hurricane Matthew triggered their Business Continuity Plans and they are busy picking up the pieces. Often the focus of recovery is on physical repairs, leaving the company's administration and operations on the back burner.

Insurance Claims

With such large-scale storms, managing the insurance claims process is vital. Here are a few things to remember:

• Understand the policy and the jargon. Before any chance of having to rely on insurance comes to pass, it is extremely important to understand the policies your business holds. As a business can have many types of insurance, there will be many policies to become familiar with. This leads to;
• A false sense of security. When you do not understand your policy there can be an exaggerated sense of comfort and preparedness. However, not knowing the ins and outs of the policies can also lead to lost insurance claims through missed reporting and documentation of losses. Therefore, it is critical to;
• Document losses. Physical losses and any lost revenues from business interruptions and contingent business interruptions may be covered by insurance. These can include losses due to road closures, evacuations and any closures required by civil authorities. Having proof of revenues during normal operations can help document the loss during contingent business interruptions.

In addition to processing insurance claims, government aid and grants may be available to help businesses recover and rebuild. Registering for these types of aid and assistance is often time-sensitive. Researching what would be available to you regionally and nationally can save critical time during an incident, ensuring you can access this funding when you would need it most.

So, in summary, here are some “lessons learned” from Hurricane Matthew:

1. Carefully consider how a disaster of this nature can and would impact your business.
2. Consider your supply chain for all goods and services. Would a disaster like this impact the resources you rely on most to support your operations?
3. How would another office or location be able to support you in an incident? Are you be able to support them? What steps can you take now to make that process easier in the future?
4. Know your insurance policies. Avoid surprises and get all the compensation you are entitled to.
5. Access aid and assistance to help you fund your recovery and speed up your return to normal operations

Using the Lac Megantic disaster to improve your BCP

In July of 2013, the deadliest Canadian rail accident since 1867 occurred in Lac Megantic, Quebec. A series of errors resulted in a train carrying crude oil to roll downhill before derailing in the town of Lac Megantic. The accident resulted in:

While it might be tempting to assume an accident of this magnitude is the result of a single large error or mechanical failure, this was not the case. Investigators identified 18 causes and contributing factors that led to the disaster. Here are a few common, but potentially dangerous assumptions, that were made by the rail company and are often heard in the emergency response and business continuity arena:

• We've trained our staff in all safety procedures. The rail engineer in the Lac Megantic disaster received training. Despite this, he did not conduct a proper brake test to ensure the locomotive was secure. The engineer applied 7 handbrakes, yet investigators estimate that the operator should have applied at least 17 brakes to secure the train. Investigations revealed that training, testing and supervision were insufficient. Safety training is important, but regular reviews and testing are just as critical. Management needs to be sure that staff are always following procedures accurately and consistently.

• We have written procedures for our staff to follow. In the rail disaster, personnel mislabeled the oil cars with the wrong type of crude oil and did not follow brake procedures. Just because procedures are written down doesn’t mean staff will always follow them. We can learn from the checklist approach used in the airline industry and now adopted in operating rooms as well. Mandatory checklists require the pilot/surgeon to physically check off that required procedures are followed, every time.

• We’ve evaluated the situation and decided it’s too costly to fix so we’re going to accept the risk. Eight months before the Lac Mégantic rail disaster the lead locomotive was in for repair. Due to the costs associated with a standard repair and the pressure to return the locomotive to service as quickly as possible, the company took short cuts using an epoxy-like material instead of performing the standard repair. This material caught fire the night of the disaster and was a significant contributing factor to the events that led to the derailment. Businesses make cost-benefit decisions everyday but we need to be sure we’re fully recognizing all the costs. The railway is now in bankruptcy protection because of the event.

• We are regulated and regularly inspected so we’re confident that we’re following all required procedures. Prior to the rail disaster, reports documented a pattern of repeat problems. Despite these reports, Transport Canada did not always follow up to ensure the company was addressing the underlying conditions that led to these recurring problems. Lack of oversight left gaps that contributed to the disaster. While many regulations exist, regulators often do not have sufficient resources to verify that companies are following the rules. Do not confuse compliance with safety. Companies need to do their own due diligence.

These are just a few of the excuses we hear companies use to make themselves feel comfortable that they’re meeting safety and business continuity obligations. These are also some of the same issues that led to the Lac Megantic disaster. Don’t assume you are meeting your obligations. Test, retest, and ensure you have tools and plans in place to ensure the safety of your operations. For a full summary of the disaster, read the Transport Safety Board of Canada’s report or watch the animation that re-enacts the events.