Manufacturing Risk Insights

Protect Your Business with a Disaster Response Plan

A disaster can occur at any time. Whether it’s a more tangible risk such as criminal activity, or an unexpected event such as terrorism or a natural disaster, businesses need to be prepared. Without prior planning, you leave your company open to financial disaster, especially if you are forced to close operations for a period of time. In addition, without a proper plan to cope with a disaster situation, your company may face lawsuits from clients, distributors or employees, claiming negligence. Security is Essential Unfortunately, manufacturing firms are often the target of theft or vandalism crimes. In many cases, the best way to prepare for a potential security threat is to take preventive steps to secure your facility. Assess your current security level and make improvements where necessary. While not all security threats can be avoided, some situations can be prevented with appropriate preparation:

• Advise management and employees to report any suspicious persons or activity in or around the building.
• Establish and follow visitor control procedures (e.g., mandatory sign-ins, name badges, escorts and orientation).
• Survey locks, fences, exterior lights and other physical security devices to ensure that they are in place where needed and in proper operating condition. Establish a monthly inspection of your security perimeter and key protective features of your facility.
• Pay special attention to areas where you are storing flammable or toxic chemicals, or other hazardous materials. These areas should be properly secured and inventoried. Though it is necessary that employees handle some of these chemicals in their daily job on the production floor, limit the handling of these materials to essential personnel and ensure that everyone knows safe handling and storage procedures.
• Evaluate critical locations in your facility for proper security, including the electric, telephone and gas units, building entrances, transformers and areas where raw materials or finished products are stored.
• If your facility has a security/fire alarm system, be sure it is operating properly and that key personnel know how to arm and disarm it.
• Ensure that fire suppression systems are regularly inspected and maintained. Also, be sure that a sufficient number of trusted personnel know how to activate, operate and shut them down.
• Security cameras can serve as an excellent crime deterrent. Additionally, when a system is equipped with a recorder it can help solve crimes.
• Review your procedures for issuing facility keys and access cards. At a minimum, keep lists of those who have been issued keys/cards and have a procedure in place for handling a situation when a troubled employee is terminated without returning them.
• Discuss security with your local police department. In general, police departments are very willing to provide information and support to businesses and industries.
• Have your local fire department conduct a pre-planned visit to your building to identify potential hazards and plan fire suppression priorities.

Preparing for a Disaster Situation It’s hard to imagine a terrorism threat or a large-scale natural disaster affecting your area. That said, it is vital that you establish a plan to cope with these threats. Here are some important disaster preparation tips to consider:

• Keep copies of insurance policies and other critical documents in a safe and accessible location (e.g., a fireproof safe).
• Evaluate which disasters are most likely to occur in your area, remembering to include the possibility for terrorist activity. Be sure you are prepared for all of the risks you identify.
• Develop a disaster recovery or business continuity plan. If you already have one, make sure that it is up to date. This entails preparing for anything that disrupts your business operations and planning for a backup option. You may consider identifying backups for essential operations, personnel, communication methods and distribution channels. One of the most important considerations for a manufacturing firm is to have contingent plans for your supply chains. A disrupted supply chain can shut down your business, yet many manufacturing firms fail to plan for this potential problem.
• Create telephone call lists for all key personnel, so required staff members can be contacted during non-working hours from any location. Review procedures for notifying employees that your facility is closed. Remind employees that they should never attempt to enter areas that are closed by police or other emergency responders.
• Check available emergency supplies such as flashlights, batteries, emergency generators/fuel, spare fire extinguishers and first aid kits. If you anticipate that any personnel would stay at the facility during or following an emergency, consider stockpiling food and water for their use.

Talk to a Leader in Risk Management for the Manufacturing Industry To learn more about preparing a disaster response plan for your business, contact the risk management professionals at VTC Insurance Group. You can reach us at 248.828.3377 or visit vtcins.com. This blog is for informational purposes only and is not intended as legal advice.