Barbara TaylorThe former home of Kraft Insurance Services in Joplin, Mo.
Transaction
Putting a price on business.
The gods must be crazy, or at the very least they seem extremely perturbed this year. Each season of 2011 has been one for the record books as far as weather events. Here in the state of Arkansas we had record cold and snowfall this winter, followed by historic flooding and tornado damage in the spring. In states throughout the south central United States, the Mississippi river went on a flooding rampage the likes of which had not been seen since the 1930s. A tornado outbreak ripped across several states, with Alabama bearing the brunt. Texas and Oklahoma are still being oppressed by relentlessly hot temperatures, and now Irene has come barreling up the eastern seaboard. Dare I ask what’s next?
While I confess to knowing nothing about climate change, I do know that — for those of us who own small businesses — the beat must go on, if not during a disaster than as soon as possible thereafter. Yet few of us seem to have a plan in place for our businesses should disaster strike. Even as I write this blog post, I am aware that — other than storing all of my office files, data and e-mail in the cloud — there isn’t much to my own disaster preparedness beyond Google Apps and a flashlight.
I have little excuse after what happened just 45 minutes to the north of me in Joplin, Mo., just three months ago. On Sunday, May 22, Joplin was hit by an EF5 multiple-vortex tornado. It was the deadliest tornado to hit the United States in decades and could be one of the most expensive, with some estimating the cost to rebuild Joplin topping out at $3 billion.
The urge to drive up to Joplin within hours of the tornado was overwhelming for those of us in neighboring cities who wanted to help, but we were warned not to “self deploy” until formal relief efforts had been completed. It was about two weeks later that my husband and I made a trip north to check on a friend’s property. While we were there, we paid a visit to the Joplin Area Chamber of Commerce where we were introduced to Randy and Shelly Kraft.
The Krafts have been Joplin residents since 1986. They established Kraft Insurance Services — an independent brokerage serving 8,000 customers in 11 states — in 1989. Their building was located just four blocks east of St. John’s Regional Medical Center in the hardest-hit part of town. “I couldn’t get within about three miles of the building,” Randy recalled of those first hours after the tornado. The streets were unrecognizable. Miraculously, about 50 percent of the Kraft Insurance building was left standing. According to Shelly, their thoughts turned immediately to their customers. “We knew they would be calling like crazy on Monday morning,” she said.
Four of the Krafts’ 13 employees showed up for work the morning after the tornado; the rest were back within a week, with several able to work remotely from home. The business — its servers undamaged — ran off of generators and cellphones for the first few days. On the fourth day, the Krafts relocated their office and call center to a banquet room at a Holiday Inn.
“We didn’t physically have a building,” said Shelly, “but Kraft Insurance was still a functional business. Many of our insurance companies provided us with basic office supplies and necessities.” It was a Progressive sales rep who helped them relocate to the temporary Holiday Inn space. While the offers of support were overwhelming, Shelly remembers having difficulty accepting them. “People are offering because they want to help,” she said. Her advice to other business owners: “Let them!”
The Krafts’ customers also rallied support. A construction company put a tarp over the roof of the Kraft building and made minor repairs to help minimize water damage during the storms that pummeled Joplin for days after the tornado. Another customer arranged for the Krafts to rent 3,200 square feet of office space until they finish repairs on their building, which they estimate will be completed within a year.
One of the challenges for Kraft Insurance was that — while 30 percent of Joplin was decimated — the rest of the city and Kraft’s out-of-state customers were not. “Those people were still buying cars and new homes. Many construction workers were coming into town needing to be bonded and insured. Regular business had to go on,” Shelly said. “We divided our staff: Some took new business while others took claims.”
I asked Shelly if the tornado had changed any of her advice about insurance. “We believe strongly in replacement cost policies, where the insurance company will pay you the replacement cost of your property instead of the actual cash value,” she said. “If one of our insureds owns a house with a market value of $50,000 and a replacement value of $120,000, we recommend that it is in their best interest to pay for the replacement cost policy.” This advice won the Krafts “many hugs” from their customers, many of whom lost everything on May 22.
Ironically, the Krafts had started working on a disaster plan before the tornado, but never completed it. Given the extent of what happened, Randy expressed doubts that the plan would have been adequate. Even their flashlights weren’t really prepared. “We had them,” Shelly said, “but none seemed to have very good batteries in them.”
What about you? Do you have a disaster plan in place for your business?
Correction: An earlier version of this post misspelled Shelly Kraft’s first name.
Article source: http://feeds.nytimes.com/click.phdo?i=0eba1155383f337f34c931a26457b3d0
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