Be Prepared!

It has been a while since I wrote a “technical” article. My desire to write on a technical matter is due to all of the unnecessary frustration I see when it comes to people, businesses and not-for-profit entities experiencing prolonged difficulties following a loss. I am addressing the necessity to have a contingency plan. You might find this to be an obvious matter and hardly worth the ink to explain, but contingency planning, or “continuity plans” or “business interruption plans,” or whatever you want to call them, are almost more rare than is the predictability of the losses that warrant them in the first place. Be prepared!

The reason I am considering this a priority is because I see losses happening almost daily, and with very few exceptions, most of those adversely affected by loss fail to have a plan as to what to do next. Instead, they are forced to figure out steps in the heat of the moment and make emergency plans even while the embers are still smoldering. Such pressure to make decisions in a crisis is going to result in a lesser quality outcome. As such, it is my counsel that each of us is immeasurably better off, if, before the storms of life hit, when there is no pressure to respond, we design contingency plans for what we will do if bad things happen to us.

Here are some suggestions. Start by identifying the threats that may effect our individual/family/business life. Death, illness, disability, fire, flood, collision, etc. are all real threats but should be addressed individually. As an example, my “premature” death will have a different effect on my stakeholders (family, fellow employees, clients, debtors, creditors, etc.) than would my disability. A flood will have a different effect on my properties than would a fire, etc. Therefore, it is important to take each contingency and evaluate its effect on those elements of my individual and business life in preparation of the future. The purchase of an insurance policy is not an alternative to contingency planning. It may be a means to finance the contingency plan, but what I am advocating does not cost much, if anything. The contingency plan may merely be devised, written, distributed to affected parties, and then pended for the day on which it is needed.

When a dam 54 miles upriver from my new office building was in threat of collapse, following hurricane Irene, purchasing flood insurance was only to provide money, should my office have been swamped. The real work was to decide what to do about assuring the safety of my staff should the flood happen during work hours. How would they get home? How would we know where everyone was if they were not in the building at the time? What would we do to assure that our clients could reach us and their insurance company if they too were flooded? What would we do about our computers and the vital records they contained? How would we notify our clients and associates so as to let them know we were in a state of emergency? How would we get to the building in the hours and days following the flood? Who would we find to make needed repairs so as to normalize our operations as quickly as possible? To qualify as a good contingency plan, all these questions needed to be answered before the first raindrops fell.

My recommendation for your contingency plan is to begin by seeking counsel from those who may be affected by such disasters; such as your spouse, your business partner, your staff or an in-house safety committee. In addition, there are many useful resources available online to help you create your contingency plans, from a pad of legal paper and asking your spouse to think about “what ifs,” to receiving, and completing contingency planning workbooks from such websites as:, and

I enjoy working with businesses’ safety committees, whereby we can lay out a listing of the greatest probable threats, prioritize the most likely to the least, and tackle all of the “what ifs” over a series of meetings. In these meetings, we write down who will do what, whom to contact, where to obtain resources, where to move what, how to obtain needed items, and a host of other potential solutions to problems that have not yet happened.

Then, in the days following, each member of the committee does their research into where, how, who, what and the costs associated with various contingencies. When the committee meets again, each member reports his/her findings; action steps are agreed upon and plans are made so that, should the storm clouds gather, there is already a game plan laid out for what should be done.

It should also be stated that, like all plans, contingency plans must be reviewed periodically and updated as appropriate. An outdated contingency plan will merely frustrate people and will likely be abandoned if not relevant or appropriate to the problem that called for its implementation. Stay on top of this and communicate its implications back to your insurance broker or counselor. It is likely that some of your plans will cost money: the cost to rent moving vans, acquire a new temporary location, obtain new furniture, hire a disaster response contractor, obtain a new network of computers, wire-in new phones, etc. Most, if not all, of these expenses are usually insurable. Don’t be like the majority of people who merely guess as to how much money they will need when those storms of life hit. Do your homework, and plan for what to do after the dam breaks so you won’t be looking for a life raft when there are not any left to rent. If you need help in this planning process, call us.

We are here to help.

Brian H. Merriam, CPCU, ARM, AAI

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Schenectady, New York 12305

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Brian H. Merriam, CPCU, ARM, AAI

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