You don't usually hear about the local businesses that go under because of hurricanes and earthquakes, but it's not uncommon for small companies to fail after such catastrophes.

Businesses located in disaster-prone areas are at a higher risk for certain natural disasters. Such companies should carry more coverage and carry specialized insurance to address those risks, but all businesses are vulnerable to accidents and emergencies. The best way to deal with uncertainty is to carry enough insurance and to be prepared.

In addition to carrying business interruption insurance, an extremely important component of an effective risk management plan is being prepared to respond quickly to an emergency or a disaster. Being prepared doesn't mean having a few gallons of water tucked away in the back of the office, nor does response mean returning to your office to inspect the damage after a disaster. It means having a plan in place that ensures you can continue to conduct business immediately after a disaster or emergency strikes. Take steps to develop plans for recovery in the event of a business disruption or a complete interruption.