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Avoiding the Disaster Within a Disaster

By:  CUNA Mutual Group

Many losses and service interruptions are unavoidable when disaster strikes, but credit unions can do three practical things now to avoid a disaster-within-a-disaster. CUNA Mutual Group’s claims specialists help credit unions recover from catastrophic losses. During September, designated by FEMA as National Preparedness Month, 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
  2. Practice your disaster response plan
  3. Set up an emergency communication procedure

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.

Three Essential Disaster Recovery Training Exercises

Your disaster recovery plan isn't ready to do its job until you've tested it and worked out the bugs. These three training exercises can do that, and also make the plan real for the employees who may be implementing it under difficult circumstances.

  1. Preliminary structured walk-through: involve all employees who play critical roles in conducting your credit union's business interruption procedures. Read through the plan together, step by step. Note any issues that arise during the walk-through and clarify them before moving on to the following simulations.
  2. Disaster simulation: The most practical type of simulation may be the "table-top" format, where the exercise is conducted in a conference room or series of rooms, where employees can gather in functional groups. It generally takes two to four hours. You need a credible disaster scenario fully written, including a series of events that happen in timed segments. A facilitator explains the hypothetical events as they happen and employees must carry out key elements of your business interruption plan.
  3. Technical "hot site": Your plan should include procedures for running operations from alternate sites. The term "Hot site" refers to a pre-determined facility where the credit union will have access to its data and the ability to conduct transactions. this is a demanding test to set up, but it provides critical hands-on experience. A hot site test should require employees to mobilize to the remote facility, establish communications with the necessary employees and vendors, and perform actual processing.

Many of the lessons CUNA Mutual Group and their bond holders have learned about how to prepare and handle disasters are channeled into the company's Protection Resource Center at