Everyday here in California the news is warning viewers of a possible El Nino weather system dumping a lot of water on this drought-stricken state. The Federal Emergency Management Agency, FEMA, is urging Californians to buy flood insurance before the stormy season starts in 30 days. Even if you have flood insurance, will your business be able to survive if it suddenly was flooded with water? If you only had a few minutes before disaster struck, would you know what items to grab before you head out the door?
One of the best ways to limit the damage to your business is to be prepared before disaster strikes. For businesses this often means knowing what business information and records are critical to operations in the event of an emergency. This critical information is called Vital Records. Vital Records “contain information needed to establish or continue an organization in the event of a disaster. They are necessary to recreate the company’s legal and financial position and to preserve the rights of the company and its employees, customers, and stockholders” (definition from Robek’s Information and Records Management). If Vital Records were lost, a business might not be able to collect on the flood insurance, accounts receivable might not be collected, contracts might not be able to be enforced and intellectual property might be lost. All of these could lead to the death of your business.
So, what can your business do to be prepared in the event of a disaster? The following 4 steps can lead your business in the right direction.
Step 1: Identify and list the critical information and records of your business. Common categories are insurance policies, accounts receivable, and contracts. Be sure to limit the information and records to be only that which is absolutely necessary for the continuation of the business (typically 3-5% of your records and information). In deciding whether a record is vital or not, you should weigh the time and cost of protecting the record versus reconstructing the record. A Vital Record program is another way of insuring your business will continue to function after a disaster.
Step 2: Determine the best way to protect each classification. There are 4 common protection methods:
Step 3: Establish a vital records program.
Step 4: Periodically review if records and information are still classified as vital. A contract that has expired or an accounts receivable invoice that has been paid typically are no longer considered vital records for the continuation of a business. So, keep this in mind when developing your vital records program. Records should be periodically reviewed to see if they should still retain their vital records extra protection.
Nitza Medina-Garcia, Certified Records Manager, Records and Information Management Consultant
Contact us today! Let us help you create a vital records inventory and program to give your business that extra protection flood insurance can’t buy.