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Avoid disaster within disaster--lessons from CMG
MADISON, Wis. (9/24/12)--Three lessons have been gleaned by CUNA Mutual Group's claims specialists and Disaster Response Team over the years from credit unions that have handled disasters better than others.

John Wallace, CUNA Mutual group vice president of commercial products, is offering advice to help others avoid "disaster within a disaster." CUNA Mutual said the advice relates to September's designation as National Preparedness Month by the Federal Emergency Management Agency (FEMA).

Review and update your insurance coverage, including extra expense coverage, said Wallace. "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."

Wallace also advises looking closely at 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. Having 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 a credit union recovers from severe damage and the indirect losses.

Practice your disaster response plan, Wallace said. The National Credit Union Administration requires credit unions to have a written plan for disaster recovery, but if employees have never seen and practiced implementing the plan, 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," he said.

Set up an emergency communications procedure. "When a disaster occurs and your insurance provider has been informed, your top priority should be communicating with employees to see who's available [and] who needs help, and to share the plan for restoring service," Wallace said.

Employees must know how to get in touch with the credit union in these situations. Every employee should have a "cheat sheet" with them or at home detailing first steps to take.  The cheat sheet should provide alternate locations designated for temporary branch service and include phone numbers and e-mails to use if phones or Internet service are available.

If phone or Internet service is unreliable, add "phone trees" to employees' cheat sheets that 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," Wallace said.

Also consider setting up an agreement with your state league to provide a toll-free number for employees to call in a disaster situation.

CUNA Mutual Group provides resources to assist with disaster preparedness on its website. The page includes links to:

  • An Extra Expense calculator to help determine whether your credit union is adequately insured;
  • Disaster preparedness risk assessment tool;
  • Property and Business Liability product sheet;
  • Information on CUNA Mutual's Disaster Response Team; and
  • U.S. Government disaster preparedness websites.
Additional information for policyholders can also be found in CUNA Mutual Group's online Protection Resource Center. Use the link.
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