When the electricity goes out at home, it’s often a simple inconvenience. Usually you can remedy this temporary situation with a flashlight and a good book or some board games. But for small business owners, the cost of power outages due to bad weather, accidents, or construction, can be severe – especially if they don’t have business insurance.

About half of business owners believe they’d lose up to $5,000 dollars an hour when electricity goes out. Others believe the cost is even higher. And power outages are not rare. In fact, they are one of the most common business disruptions. In other words, prepare for—don’t underestimate—the risks of power outages.

Steps to Mitigate the Business Risk of Power Outages

Here are a few steps small business owners can take to protect their business from the consequences of power outages:

Identify Where Your Business is Most Vulnerable

Power outages may be unexpected, but the effect they’ll have on your business shouldn’t be. The best way to weather losing electricity is to anticipate what part of your business would be impacted most and how that would affect overall profit.

The answer will largely depend on the specific operations of your business. If you’re an ecommerce company that runs your website on an in-house server, no power means no online portal to take orders. If you manufacture a product with equipment that runs on electricity, no power means you can’t make the product and may miss deadlines to fill orders. Whatever your business is, you need to identify where you’re most vulnerable. This gives you a chance to devise a plan that keeps your business running during a power disruption. Don’t just settle with the attitude: “If the power is out, there’s nothing we can do.”

Make Sure You Have the Basics Covered

While some power outage prep may depend on your business type, other steps pertain to all small businesses. Avoid data loss by backing up your information and documents off site—ideally in cloud storage with frequently scheduled backups. That way if the power suddenly goes out, you have a safety net.

And just like you would for a natural disaster, set up a continuity plan. If the power is out for a few days, will you and your employees go to a pre-arranged temporary place of business? Will everyone work from home? If so, have you set your employees up with VPNs to do that? How will you communicate? A good continuity plan will include answers to all those questions. Don’t forget the small things. Have flashlights, surge protectors and first aid kits on-hand.

Invest in Backup Power

If you think backup generators and batteries are an unnecessary expense and that surge protectors and cloud backup is all you need, you may want to reconsider. Investing in alternate power is not only worthwhile for keeping your business running during an outage; it also buys you valuable time. Specifically it gives you time to finish your work, to save your files and to double-check that everything is safely in the cloud.

Backup power also gives you the chance to turn off all appliances and equipment. Why is it important? If everything is on when the power goes out, that means it will all turn back on at once when power is restored. And that can create a power surge that could damage sensitive equipment or overload the still recovering electrical circuit—possibly even plunging you right back into darkness. Backup power can go a long way toward easing you in and out of power outages with minimal fuss.

Protect Yourself with Business Insurance

No matter how prepared you are, your business may incur some financial impact that is simply unavoidable. At the end of the day, one of the best ways to minimize that financial blow is to have the right insurance in place. Long before the power goes out, be sure to have a talk with your insurance representative. Discuss what coverage you need to protect your company in the event of a business disruption like a power outage. This way, when the power goes out, in addition to taking the protective steps above, you can grab your policy and call your insurance provider feeling confident you’ve protected your business. Lights out at your business doesn’t have to mean lights out for your business.

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