The Importance of a Having a Disaster Response Policy

Pandemics, wildfires and other major disasters are now a business responsibility. The media reports which brands are contributing what, workers ask employers for ways to help and affected communities take note of which businesses are sensitive to their plight.

What’s a business leader to do? The most important step is to set up a response policy before disaster strikes. You don’t want to be caught making decisions ad hoc as homes burn or people fall ill. In crafting a disaster response policy, the most important considerations are:

• Employees. Your first responsibility is to your employees. How will you treat pay, leave and other issues affecting employees stricken by disasters? Do you want to support such employees with monetary assistance? Will these be loans or gifts? Can employees support other employees? Have you considered the tax implications? How will you facilitate employee disaster relief contributions of money or time? CVS Health, for example, includes the following language in its disaster response policy:

"At CVS Health, our employees can support each other by donating to our Employee Relief Fund, a public charity designed to help CVS Health employees during unanticipated and unavoidable financial hardships and emergencies. Funded by employee contributions through payroll deduction and an initial donation from CVS Health, our Employee Relief Fund provides short-term, immediate financial relief to employees who’ve suffered significant hardship as a result of a natural disaster, family death, medical emergency or other unforeseen designated events."

• Customer and business partners. Your second responsibility is to your customers and business partners. Might customers affected by disasters benefit from a due-date extension? A dedicated support line? In-kind product? Do you have retailers or suppliers that need help re-establishing operations? MassMutual’s policy, for example, includes this language:

"MassMutual’s disaster relief and servicing guidelines help ensure that policyowners and clients in impacted areas have service and product options available to them when natural disasters occur. These may include extended grace periods, lost policy assistance, address change support, and various policy and plan provisions. For more information, click here or call our Customer Service Center at (800) 272-2216 with questions about insurance policies and annuities, or call (800) 743-5274 with questions about retirement plans."

• Community. Your third disaster response responsibility is to victims other than employees, customers and business partners. This also requires responding to many questions. What qualifies as a disaster? Does it need to be a presidentially declared? What if it’s in Mexico or Thailand? How will you assist victims? Which nonprofit organizations will you partner with? An example of a disaster response policy oriented toward the community is PetSmart’s:

​​​"We're here to help in the event of a natural or man-made disaster. In case of an emergency, funds are available to assist during the rescue, relief, and/or recovery stages for qualifying organizations seeking to assist more than 20 companion pets impacted by the disaster."

Looking for additional assistance in crafting your disaster response practice? Contact us!