Avoiding the Disaster Within a Disaster
Consider lessons gleaned from credit unions that have handled disasters.
Year after year, disaster after disaster, CUNA Mutual Group’s claims specialists help credit unions recover from catastrophic losses. Consider three lessons the company has gleaned from credit unions that tend to handle disasters better than others.
1. Review and update your insurance coverage—including extra expense coverage
Understand what your insurance does and doesn’t cover. If your policy doesn’t provide 100% replacement value for property, be sure the credit union is prepared for the co-pay. Also, take into account any property improvements made since the last time you updated your policy limits.
Look closely at your coverage limits for extra expenses involved in providing member service during disaster recovery. It’s difficult to over-estimate what it will cost to run a credit union when a branch or main office has been damaged or destroyed.
Adequate “Extra Expense” and other coverage limits for buildings, business personal property, and data processing can be the major factor in how quickly and completely you can recover from severe damage and the indirect losses.
2. Practice your disaster response plan
The NCUA requires credit unions to have a written plan for disaster recovery. If credit union employees have never seen and practiced implementing the plan, however, chances are it won’t work when disaster strikes.
Having all employees read through and practice the plan helps you find bugs and work them out. And it’s important for all employees to be aware of the plan because, in an emergency, any one of them may end up having to make quick, important decisions.
3. Set up an emergency communication procedure
When disaster strikes and your insurance provider has been informed, your top priority should be communicating with employees to see who’s available, who needs help, and to share the plan for restoring service. This means that before disaster strikes, employees must have an idea how to get in touch with the credit union in these situations. Every employee should have a “cheat sheet” with them or at home that details the first steps to take. For example, the cheat sheet should provide alternate locations designated for temporary branch service.
The cheat sheet should also include phone numbers and emails to use if phones or Internet service are available.
To prepare for unreliable phone/internet service, consider “phone trees.” On each employee’s cheat sheet, include the names and contact information of several other employees. Instruct employees to call each person on their list—they may get through to one co-worker who in turn has found someone else, and so on. Word about who’s available, who might need assistance, and what to do next can spread surprisingly fast this way.
Also consider setting up an agreement with your state league to provide a toll-free number for employees to call in a disaster situation.
Many of the lessons CUNA Mutual Group and their bond holders have learned about how to prepare for and handle disasters are channeled into the company’s Protection Resource Center at www.cunamutual.com.