7 Disaster Planning Tips For Businesses In 2022

Hurricane damage on a building

Is your business prepared in the event of a natural disaster? Extreme winter storms, flooding, hurricanes, tornados, tropical storms, and wildfires can strike without mercy. As hurricane season kicks off for the year, putting preventative safety measures in place is the key to protecting your business.

Here are seven tips from the IRS that can help with disaster planning and the rebuilding process in the wake of a catastrophe.

1. Secure key documents and make copies

Important original documents such as tax returns, deeds, titles, and insurance policies should be placed in a secure area or a waterproof container. You can also make duplicates of these items and store them with a trusted individual outside of the office, or digitally.

2. Minimize data loss and downtime

A disaster has the potential to damage your critical business systems. Backing up your data regularly to an off-site location will greatly decrease your chances of data loss. IT professionals advise businesses to create their own regular backup schedules and become familiar with restoring those backups in the event of an emergency.

3. Continuity of operations planning for businesses

Your company’s ability to bounce back after an extreme weather event depends on the emergency disaster planning done today. As your business evolves, so should your preparedness. Review your emergency plans annually to ensure you have the correct amount of coverage. The IRS suggests the following preparedness strategies common to all disasters:

  • Get informed about hazards and emergencies and learn what to do for specific hazards.
  • Develop an emergency plan.
  • Learn where to seek shelter from all types of hazards.
  • Back up your computer data systems regularly.
  • Decide how you will communicate with employees, customers and others.
  • Use cell phones, walkie-talkies or other devices that do not rely on electricity as a backup to your telecommunications system.
  • Collect and assemble a disaster supplies kit, which should include a portable generator.
  • Identify the community warning systems and evacuation routes.
  • Include required information from community and school plans.
  • Practice and maintain your plan.

4. Document valuables and business equipment

Taking photos or videos of the contents of your office, especially high value items, can be beneficial when claiming insurance and tax benefits after a disaster strikes. Photos help to prove the fair market value of items for insurance and casualty loss claims alike. The IRS has disaster loss workbooks for individuals and businesses to help compile a room-by-room inventory of belongings.

5. Take advantage of paperless recordkeeping for financial and tax records

Many businesses receive their bank statements and other important documents via email, which can be a secure way to obtain financial records. Tax records like employee W-2s and tax returns can easily be scanned into an electronic file, so taking the time to transfer these could be beneficial in the long run in the event of a disaster.

6. Check on fiduciary bonds

Employers leveraging payroll services should ask their providers if they have a fiduciary bond in place – the bond could safeguard the employer in the event of default by their provider.

7. Reconstruct records

In the unfortunate event your business’s building falls victim to a natural disaster and loses some or all of its records, it is important to replace them to your best ability for tax purposes, insurance reimbursement and/or federal assistance. Visit the IRS’ Reconstructing Records page for more information on steps to take when replacing key documentation.

 

We can help

Our team of advisors offers support with disaster planning—helping you evaluate your unique needs. We can identify risks, take advantage of tax relief as it becomes available, and review your current plans to ensure your business is covered.

Want to better protect your business from natural disasters?