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Coping With Disaster
August 9, 2007
We buy fire insurance, earthquake insurance, car and life insurance, AD & D insurance, key man and mortgage insurance. What do we do for our retail businesses if disaster strikes? I was struck some time ago by the thought, “What would we do if we were closed down for a lengthy period of time?” when the Mississippi flooded out towns. Then there is the classic case of Rita and Katrina hitting the gulf coast and New Orleans. And just last month in Tornado Alley a whole town was wiped out. What kind of insurance do you need? How do you get back on your feet? What documents do you need? Here’s a start at some answers. The rest of the guide can be read at the City of Galveston Hurricane Preparedness website
- Check your disaster supplies kit. Obtain any needed items.
- Check your insurance policies. Organize important documents into an easy to transport file. Photo identification and other documentation will be required in the event of an evacuation and reentry. Please see reentry plan for specific information.
- Protect your windows and glass doors.
- Get cash. Banks and ATMs won't be in operation without electricity and few stores will be able to accept credit cards.
Business and farm loans are available to people who have suffered damage to business property or economic injury. These low-interest loans are available through the Small Business Administration and the Farm Service Agency (FSA), to repair or replace damaged property not covered by insurance, and to provide working capital.
In Lessons learned: CPAs share tips on disaster recovery we learn that there are a lot of ways to run afoul of the tax laws when you have a disaster. Check with your CPA before signing any papers from the insurance company that involves settlement. "Most survivors ignore the role of a CPA in their insurance settlement process," says (George) Kehrer executive director of CARe--Community Assisting Recovery, Inc.. "It's really not until after their settlement that it occurs to them to consult a CPA. And then it may be too late to structure their settlement in a way that avoids some of the tax burdens."
Another problem in a disaster is cash flow.
“When advising disaster victims, CPA/PFS Meloni Hallock, a member of the board of directors and executive committee of the American Red Cross of Greater Los Angeles says the first questions often concern cash flow. "They need to figure out how to pay immediate bills, like a hotel room or interim housing," she says. "Just getting a new driver's license and documents replaced, those all have a fee.”
Posted by Mike Landfair on August 9, 2007 | Comments (0)
