The National Oceanic and Atmospheric Administration (NOAA) announced relatively mild predictions for the 2016 hurricane season, but that doesn’t mean business owners should assume that they can function without an emergency plan in place.
Although the NOAA predicts Atlantic coastal areas are likely to be in for a near-normal hurricane season (with a 70 percent likelihood of 10 to 16 named storms), the outlook for the West Coast isn’t as sunny. The NOAA predicts a 40 percent chance of a near-normal or above-normal hurricane season for the Central Pacific and a 30 percent chance of a near-normal or above-normal season for the Eastern Pacific hurricane basin — with 13 to 20 named storms and up to 11 hurricanes.1
But no matter where a business is located, business owners should be prepared for possible storms. As we saw with Tropical Storm Bill in Texas, smaller storms and flooding can still cause massive property damage, injury, and even death. And unfortunately, it can be difficult for a business to recover once it closes as a result of a disaster. To help keep their businesses up and running, business owners should make sure to have the right insurance coverage, a sound structure, and a solid business continuity plan in place. Now is as good of a time as any to prepare your business to weather a (literal) storm.
Here are a few tips to consider to help protect businesses in case of disaster:
Double-check your insurance coverage
Most business owners buy insurance within a property or liability package and assume it will protect them in the event of a hurricane.
However, damage resulting from floods and high-hazard winds isn’t always covered — especially in flood-prone areas. Worse yet, if a named windstorm or a high-hazard flood damages your business, you’ll likely need coverage for that specific storm. Don’t assume your current insurance policy is sufficient; double-check your package now to make sure your business will be covered later down the road.
Get to know your broker
Whether you choose to stick with your current coverage or buy additional insurance, you should start developing a relationship with your insurance broker this year. A broker typically counsels on specific coverage needs, so it’s crucial that he or she understands how your business runs, who it depends on, and how customers get to your place of business.
Establish a disaster plan
Just as you have emergency exits in case of a fire, you should also consider a well-thought-out disaster plan to use in the event of a tropical storm or hurricane. Here are a few questions you can ask to help ensure that your business can continue to operate:
- How are you protecting your facilities and equipment?
- Is your business located in a high-hazard area that could be evacuated?
- Is there somewhere else you can conduct business if your main facility is compromised?
- Are there airports or bridges nearby that might affect access to your business? (Seasonal - businesses such as those in the hospitality industry are often hit hardest when travel is difficult.)
- Are your records protected? (Important documents and customer records are often destroyed in floods, which makes cloud storage a viable off-site storage option.)
You don’t necessarily need a written business continuity plan, but you and key employees should be on the same page so you can act quickly if your area is hit by a storm.
Prepare your roof and windows
In the aftermath of Hurricane Sandy, 19,000 small businesses in New Jersey incurred $250,000 or more in damages. Roof and window damage is common in tropical storms, but a properly maintained facility is more likely to withstand heavy wind and rain.
Storm shutters or laminated glass with impact-resistant glazing can offer protection from damaging winds, or you can cover windows with plywood before a storm. Hurricane clips or straps can also provide extra roofing structural support. At the very least, consider having a contractor inspect your roof for loose, missing, or damaged shingles. If you notice a leak, look for standing water, clogged gutters, or damaged flashing.
After the devastating hurricanes of the past decade, it’s normal to feel relieved by the NOAA’s predictions for 2016. However, as a business owner, your employees and their families depend on you to stay up and running. Being unprepared may be costly and there’s never been a better time to batten down the hatches. With the right coverage and a solid emergency plan, you’ll be more prepared no matter what the season brings.
Interested in learning more about how your business can prepare for a hurricane? Sign up for recurring updates from the Knowledge and Insights Center.
Nadine Silva is the Executive VP of Lexington Insurance/AIG Property & Casualty.
1 “Near-normal Atlantic hurricane season is most likely this year”. National Oceanic and Atmospheric Administration, May 27, 2016. Accessed online on June 17, 2016 at http://www.noaa.gov/near-normal-atlantic-hurricane-season-most-likely-year.
*Companies and individuals should not solely rely on the information or suggestions provided in this article for the prevention or mitigation of the risks discussed herein and should seek the advice of an independent advisor for more complete information concerning their particular circumstances and any statements made in this material.