Small business risk: Fire ranks high

Going into business is heavy with financial risk but, once in business, natural disasters or unforeseen problems can create catastrophe.

Fire ranks high as a potentially devastating risk for business.

More than 75 percent of companies that experience a serious fire go out of business within three years of reopening, according to Phoenix Fire Protection.

Proper insurance can cushion destruction of assets and business interruption costs, but it won’t stem loss of customers, employees and data.

Of these three risks, data loss may be the easiest to mitigate.

* Daily off-site backups are key. On-site backups may seem sufficient unless a fire begins on the weekend or a holiday.

* Check backups regularly.

* Make sure at least two people know how to retrieve backups.

Make a pre-fire or disaster plan. Some of the questions you can ask:

* How can you protect IT equipment from fire or other disasters? If you can’t protect equipment, how will you replace it after the emergency?

* How will you retrieve data? Who will do it?

* Where will you operate? Will you need a generator for electricity? If so, where will you get the fuel to power the generator?

* What are the steps you will take to replace inventory? Is it necessary or possible to insure inventory? What is the worst case scenario if it isn’t insured?