Natural disasters pose one of the biggest threats to your business operations. Even though there is no way to predict exactly when they’ll strike, the chance that a hurricane, tornado, flood, or fire comes your way is much higher than you might think. Research compiled by the Insurance Information Institute provides some interesting perspective on the frequency of natural disasters and the losses organisations incurred in 2016.
According to the data, there were a total of 91 natural disasters in the United States in 2016, resulting in $23.8 billion in insured losses. That’s up from the $16.1 billion calculated in 2015.
- Severe thunderstorms accounted for the highest number of catastrophes at 43, costing businesses $14 billion in insured losses.
- A total of 19 floods and flash floods resulted in $4.3 billion in insured losses.
- A total of 18 wildfires, heatwaves and other heat-related events resulted in $1 billion insured losses.
- A total of seven winter storms and cold spells resulted in $1 billion in insured losses.
- Although there were only two tropical cyclones in 2016, the damage was severe enough to cause $3.5 billion in insured losses.
Also, according to the Insurance Information Institute, the first quarter of 2017 was the costliest first quarter in terms of insurance losses in 20 years (when the 1994 California earthquake occurred). With a bad wildfire season in the Western United States and devastating hurricanes in the Southeast, the second and third quarters will be costly too.
Despite their frequency, natural catastrophes aren’t the only disasters you have to worry about. Natural disasters represent only a fraction of total data loss across the board. The rest is attributed to instances such as data corruption, system failure, and human error. In fact, hardware failure is responsible for half the downtime that small to midsised businesses experience.
When Risk Management Meets Disaster Recovery
In an ideal scenario, business continuity planning will prepare your organisation for every possible disaster and allow you to resume regular operations when the unthinkable happens quickly. Unfortunately, ideal scenarios and real-world scenarios are two different things. While it sounds good in theory, trying to protect against every possible catastrophe is cost-prohibitive and therefore impractical for most businesses. Planning for the most likely disasters makes the most financial sense. In order to do that, you must incorporate a risk management component into your disaster recovery strategy.
Risk management helps you spend wisely by investing your budget in disaster scenarios that pose the biggest threats to your business. For instance, if your data centre is located in Southern California, then earthquakes are a legitimate concern. On the other hand, if you’re in a Northeast region such as Maine, then snowstorms are something you should plan for during the winter months. In the event that you have applications deployed in the cloud, make sure you know exactly where your data is hosted so you can plan accordingly.
Whether your risk management efforts uncover one type of event or another, there are certain disasters every organisation should plan for. Realizing this, you know security (both physical and IT-based), data backup, and testing are cornerstones of any disaster recovery plan. A commitment to security can help prevent disasters while a good backup plan is essential to being able to rebound when disaster does strike.
And if you don’t conduct periodic tests to make sure staff is prepared and your data can be recovered, that plan itself is all but useless.
You never know when disaster will strike or in what form. What you can do is anticipate your biggest risks and prepare for the worst. At the end of the day, disaster preparedness is the key to disaster recovery.