Building a Crisis Management Plan: Preparing for the Unexpected

A crisis can strike any business at any time. From a workplace accident to a natural disaster, a well-crafted crisis management plan can be the difference between weathering the storm and succumbing to circumstances.

Potential crisis scenarios

• Employee or third-party death: A death on company property is a devastating event. A crisis management plan can help ensure swift and appropriate responses to authorities, families, and the media.
• Serious incidents: Accidents, injuries, or environmental spills can have lasting consequences. A plan can mitigate damage and ensure proper communication with all stakeholders.
• Criminal acts: Theft, fraud, or vandalism can disrupt operations and damage your reputation. Crisis management plans can help you respond effectively to law enforcement and minimize negative publicity.
• Products creating incidents: If a product causes harm, a swift and decisive response is crucial. Having a plan can help you quickly identify and address the issue.
• Natural disasters: Floods, fires, and other extreme weather events cause significant damage and disruption. A plan can help your company recover and get back on its feet.

Why plan ahead?

Being unprepared during a crisis can lead to chaos and costly mistakes. A thorough crisis management plan provides a roadmap for navigating challenging situations. A plan is vital for several reasons:

• Untrained employees fail: In a crisis, untrained employees may panic or become indecisive. Proper crisis training empowers them to respond effectively.
• Time-to-recovery: A well-rehearsed plan can minimize damage and ensure a faster recovery.
• Investigation response: Knowing who will be probing the incident is crucial for providing accurate information.
• Reputational damage control: A crisis management plan can help protect your company's reputation by ensuring precise and consistent communication.
• Speed-up claims: A well-documented crisis response plan, along with clear communication with your insurance carrier, can streamline the claims process and expedite coverage for losses.

Building your crisis management plan

You can begin compiling your plan with these steps:

• Possible events: Identify the types of crises your plan addresses.
• Response: Outline the steps to take in the immediate aftermath of a crisis.
• Communication: Establish a clear and concise communication strategy for employees, media, and other stakeholders.
• Design: Make the plan easy to understand and navigate. Use subheadings, flowcharts, and clear language.
• Checklist: Consider including a checklist of essential actions to take during a crisis.
• Contact information: Include detailed contact information for all key personnel, including legal counsel, your insurance carrier, and emergency services.

Developing your crisis management team

A well-coordinated team is essential for effective crisis management. Here are the key members and their roles:

• Upper management: Provides leadership and decision-making during a crisis.
• Legal counsel: Offers legal advice and ensures compliance with all regulations.
• Operations: Manages logistics and ensures business continuity.
• IT: Maintains communication systems and protects sensitive data.
• Public relations: Develops and disseminates crisis communication messages.
• Human resources: Supports employees and addresses their needs during a crisis.
• Business units: Provide specific knowledge and expertise relevant to the crisis.
• Facilities management: Ensures the safety and security of company property.

Pre-planning exercises

Regularly exercising your crisis management plan can make it instinctual when an unfortunate event happens. Here are some effective methods:

• Brainstorming and role-playing: Simulate potential crisis scenarios and brainstorm potential responses.
• Roundtable and tabletop exercises: Gather your team to discuss potential crises and rehearse responses.
• Past crises and near misses: Review past incidents and identify areas for improvement.
• Vulnerability identification: Analyze your company's vulnerabilities to potential crises.
• Mock emergencies: Conduct periodic mock emergencies to test your plan and identify weaknesses.
• Redundant training: Regularly train employees on basic emergency response procedures.
• Team captains: Appoint team captains to lead specific aspects of the crisis response.

Internal communication

Effective internal communication is crucial during a crisis. Here are some key elements:

• Crisis communication team: Establish a dedicated team to communicate with employees.
• Communication channels: Identify multiple channels to reach employees, such as mass texts, emails, or intercom systems.
• Timely and accurate information: Provide employees with accurate and up-to-date information as soon as possible.

External communication

Productive communication with external audiences is essential for minimizing reputational damage. Consider the following:

• Reporting to authorities: Report the crisis to the appropriate local, state, and federal agencies, as required.
• Positive messaging: Develop positive messages highlighting your company's safety record, community involvement, or charitable giving.
• Single point of contact: Designate one spokesperson to communicate with the media.
• Understanding the situation: Gather all the facts before making any public statements.
• Legal considerations: Be aware of the potential legal ramifications of your statements.
• Social media monitoring: Monitor social media for crisis mentions and promptly address concerns.
• Past issues: Be prepared to address any past issues that may be relevant to the crisis.

Learning from experience

After a crisis has subsided, it's crucial to take time for debriefing and analysis. This process allows you to identify areas for improvement and ensure your crisis management plan remains effective. Here are some critical aspects of post-crisis analysis:

• Lessons learned: Gather your team to discuss the crisis response. Identify what worked well and what could’ve been handled differently.
• Sharing learnings: Don't limit your learnings to just the team directly involved. Share key takeaways with other company locations or branches to improve overall preparedness across the organization.
• Documentation: Create a detailed record of the crisis and your response. This documentation will be invaluable for future reference and training purposes.
• Follow-up: Assign clear follow-up tasks with deadlines and designate individuals accountable for their completion. This ensures that you can implement identified improvements effectively.
• Plan updates: Based on what you have learned, update your crisis management plan to reflect the new knowledge and best practices gained from the experience. This continuous improvement ensures your plan remains relevant and effective in future situations.

Insurance considerations

Having the right insurance can help your company recover financially from a crisis. General business interruption, property, and liability insurance are likely important for most businesses. Depending on your industry, you may also want to consider cybersecurity, product liability, and D&O (Directors & Officers).

Before an incident can occur, ensure you have up-to-date contact information for your insurance broker and carrier. After an incident occurs, take steps to preserve property, report claims promptly, track expenses, and hire licensed contractors.

Employee Assistance Programs (EAPs)

Employee Assistance Programs (EAPs) act as a safety net for employees facing a crisis. These programs offer a variety of support services, including mental health resources like counseling and referrals to therapists. EAPs can also provide short-term financial assistance to employees experiencing financial hardship due to a crisis. Additionally, some EAPs may offer legal advice, childcare assistance, and eldercare assistance, depending on the specific program.

A plan for whatever comes next

By following these steps and utilizing available resources, you can develop a comprehensive crisis management plan. Being prepared for anything will allow you to navigate any challenges that may lie ahead.

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The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.