Toronto, ON (May 13, 2014) – “Be prepared” seems to be a good motto by which to manage your life. If part of your livelihood is running a small business, the same adage applies there. Understand your risks; prepare an action plan – even a simple one – to draw upon in case the risk becomes a real event; and backstop your financial exposures with insurance.
Even those who were never Scouts have at some point undoubtedly encountered their motto: “Be Prepared.” Robert Baden-Powell, the father of scouting, explained the mental aspect of this maxim as “Be Prepared in Mind by having disciplined yourself to be obedient to every order, and also by having thought out beforehand any accident or situation that might occur, so that you know the right thing to do at the right moment, and are willing to do it.”
Everyone has always been exposed to a possible severe weather event. As a farm-kid in Southern Ontario some 60 years ago, I recall a tornado destroying farm buildings a mile away, and the winds and rains from Hurricane Hazel. A summer thunderstorm flooded the nearby creek and washed out half a culvert; an unwitting neighbour almost tried to drive over it, not realizing that the flowing water hid the fact that the culvert was gone.
Surely even the skeptics now accept that the world’s climate is changing and that one of the characteristics of this change is an increase in both the severity and frequency of severe weather events.
On that basis, it was surprising to see the results of a CIBC poll, reported in May of 2014, which indicated that more than one third (35 per cent) of small business owners still don’t have contingency plans for weather-related work stoppages.
An Industry Canada report from August 2013 shows almost 1.1 million small businesses with one to ninety-nine employees in Canada. On that basis almost four hundred thousand small businesses, with perhaps a million or more employees are not following the famous scouting admonition.
Developing a contingency plan need not be huge exercise, and there are various resources available, from internet research and guides to industry associations. Good risk management and mitigation plans, as evidenced by things such as reliable contingency planning, can reduce the cost of insurance. As a result, a good insurance advisor will understand these opportunities, and may well offer advice, direction and even assistance to small businesses in order to “be prepared.”
By Doug Grant, CIP