As a busy real estate broker, managing risk is a critical part of your business. This means you need to provide guidance to your real estate agents about potential risks and how to minimize them. This month’s topic to discuss with your agents is Disaster Preparedness.
Disaster preparedness is one of those issues that’s often forgotten or delayed, because brokers are busy and you figure the chances of a disaster happening are low. But, keep in mind, according to REALTOR® Magazine, “The costs associated with natural disasters in the U.S. reached a record high of $306 billion in 2017”.
So, while it’s easy to overlook disaster preparedness, if you’re not adequately prepared, you could face no longer having a business at all.
What is Disaster Preparedness?
Businesses face risks and potential disaster every day. Disasters can include floods, tornadoes, earthquakes, fires, accidents, acts of violence, health hazards, and major equipment failure (such as your IT systems or other mission-critical assets). Even a power outage can wreak havoc with your business. You might consider it less important than earthquakes and tornadoes, but did you know, according to the Federal Emergency Management Agency (FEMA), power outages cost the economy in the United States more than $20 billion each year?
Disaster preparedness is simply having a comprehensive plan in place, which you can implement if any disasters occur. Failure to have an appropriate plan can significantly reduce your reaction time, and you could be putting your agents and your business at risk.
What You Can Do to Plan for Disaster?
- Check your insurance coverage
- Identify your most likely risks, so you know what potential disasters to prepare for.
- Brainstorm strategies to mitigate the risks identified
- Develop an emergency management plan, so your team knows exactly what to do in case of emergency
- Develop a business continuity plan detailing how your business will continue if a disaster happens
- Consider what would happen if you can no longer use your building — how will you operate your business? You may need to budget for additional rent, or will your agents work from home?
- Consider if you need first-aid-trained people within your business
- Develop a checklist of responsibilities, so everyone knows who has to do what, and when, if disaster strikes
- Ensure you have adequate workplace safety measures in place — for example, emergency exits, evacuation procedures, fire equipment, etc.
- Backup your IT systems and have a plan in place about who will access the backup and how to minimize downtime
- Make a plan for how you will pay your staff and contractors if your IT systems are down or if your building is inaccessible
- Think about how you will contact all of your clients – when will you contact them and through what method?
- Consider pending transactions – Disasters may delay settlements and, in the case of a natural disaster, some of your listings may have suffered damage which can affect the sale. Check out this useful resource from the NAR for some guidance.
The Federal Government also has some fantastic resources on disaster preparedness for business. You can access them here: https://www.ready.gov/business-toolkit
What a CRES Business Owner’s Policy Will Cover
A CRES Business Owner’s Policy protects real estate, property management, appraisal, or mortgage businesses against expensive crises. The policy combines these essential types of coverage into one convenient package:
- General Liability, protecting you if others get injured or if their property is damaged during a covered activity
- Buildings and Property Coverage, which pays for repairs to your building, and equipment replacement in the event of fire, theft or casualty. Importantly, it also includes coverage so you can set up a temporary office someplace else to keep your business running.
- Loss of Business Income covers ongoing expenses, including payroll, due to a covered claim that prevents you from using your office or facility.
- Equipment Breakdown, which will replace or repair equipment damaged by power surges, mechanical breakdown, burnout, or operator error.
- Medical Payments, covering medical expenses resulting from injury to others on property you own or rent.
Not specifically related to disaster preparedness, but as an added feature, CRES Business Owner Policies also cover Personal and Advertising Injury, which allows you to defend against copyright infringement, libel, and slander claims.
CRES also offers Team Coverage. Most policies don’t mention team coverage at all, which means many claims are denied by other insurers. However, because we know real estate teams are common, we adjusted our language to suit — so you have peace of mind knowing you and your team will be protected.
Be Prepared — Contact CRES to Discuss Your Insurance Coverage
Adequate insurance coverage is critical. Contact the CRES team today on 800-880-2747 for a confidential discussion.
