Apr. 30--OGDEN -- Utahns are known for preparing their families for emergencies and disasters. But when it comes to readying businesses for the unexpected, officials say there is plenty of room to improve.
Natural disasters, infrastructure failures, computer viruses, and a host of other potential problems can hit a company at any time, regardless of its size.
Aside from the potential hazards to human health and life, these events can cripple a business financially, especially if it has no plan in place to deal with such situations.
Renee Murphy, coordinator for the Utah Department of Emergency Services and Homeland Security, said the problems with business recovery in New Orleans following Hurricane Katrina have brought to light, at least in part, a general lack of emergency and disaster preparedness among businesses nationwide.
"They haven't been able to recover quickly because of a lack of continuity planning," Murphy said. "We want businesses to be prepared in advance, because we will have a disaster here eventually."
At an emergency preparedness conference in Ogden last Thursday, Lt. Gov. Gary Herbert said businesses play a crucial role in disaster recovery, and therefore need an extra level of preparation.
"The business community is the first to be hit when disaster strikes," Herbert said. "People will go to grocery stores and other businesses first, and there could be a lot of chaos" if there is no emergency plan in place.
Herbert is spearheading an initiative called Be Ready Utah, a disaster preparedness program that works with local governments to educate and implement preparation in all aspects of the community, including businesses.
Thursday's conference brought together state and local government officials, fire and police officials, and local business leaders. Topics ranged from backup data storage to evacuation planning and procedures.
While government plays an important role in disaster mitigation and recovery, Herbert said business owners also need to make individual efforts to minimize the impact of a destructive event.
"When something happens, we think the cavalry is going to rush in and save us," he said. "We need to ask what we can do for ourselves."
While the safety of employees and customers is paramount in any disaster, it is the loss of critical data that often puts businesses out of commission.
According to the U.S. Small Business Administration, 93 percent of businesses that experience a major data loss never fully recover the missing information, making it the No. 1 reason for small-business failure.
Any business should have important data backed up and stored off-site, said Harold Welch, senior field application engineer with Iomega Corp.
"When you keep a copy of your data away from your primary location, your chances of having the information protected are much greater," Welch said.
Insurance is another major consideration. In addition to flood and earthquake insurance that covers direct physical damage, many opt for business interruption coverage, which compensates businesses for losses incurred when a disaster interferes with the normal course of business.
The "surplus lines" insurance market, which includes earthquake, mudslide and other high-risk types of coverage, is a $100 million annual industry in Utah, said Brad Tibbitts, director of life, casualty and property insurance for the Utah Department of Insurance.
Identifying and prioritizing risks, developing a preparation and recovery plan, and testing the plan frequently are the keys to successful disaster mitigation in the workplace, said Sherry Vasa, executive director of human resources for Autoliv Inc. in Utah.
"This can be an overwhelming task," she said. "You have to work through it one thing at a time, and eventually it will come together."
Ron Dittemore, president of ATK Launch Systems in Box Elder County and a former space shuttle flight director for NASA, said the same concepts used to prepare for space flight missions can be loosely applied to any company wanting to develop a better contingency plan.
Shuttle flight controllers practice flight simulations over and over, increasing the number of system failures each time until they can handle dozens of failures in a 10-minute period, he said.
"You get used to so many stimuli that when a real problem comes, it's like a walk in the park," Dittemore said. "Preparation and training are absolutely essential for us to be able to react under stressful conditions."
Dave Hardman, president of the Ogden/Weber Chamber of Commerce, said he saw preparation come in handy on several occasions in a previous job as manager of area ZCMI department stores.
He cited one occasion when a live bomb was found on ZCMI property on a busy Saturday. It was the second time a bomb had been found on the property, but in both cases, the bombs were found and diffused before they could explode.
"Due to preparation, planning and practice, our security system worked," he said. The flagship ZCMI store in downtown Salt Lake City narrowly escaped the August 1999 tornado, which caused about $150 million in property damage downtown.
The effort to increase awareness and implementation of continuity plans is still young, but growing, said Ron Ball, Ogden risk manager. Incorporating businesses in disaster preparation and recovery is a critical aspect of a wider community plan, he said.
"We need agreements with grocery stores, clothing stores, transportation companies and others," Ball said. "There's no way any government agency has the resources on its own to deal with a major disaster -- we need the support of the business community."
[Standard-Examiner (Ogden, UT) (KRT) -- 05/01/06]