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The 2017 and 2018 Atlantic hurricane seasons have been among the worst in history.

In 2017, four hurricanes – Harvey, Irma, Maria, and Nate – were so costly in terms of death and destruction that the U.N. World Meteorological Organization, which since 1979 uses a six-year naming rotation, will no longer assign those names to hurricanes. They join the list of retired exceptional hurricane names such as Katrina, Sandy, and Isabel.

The 2017 hurricane season was not only the most active storm season in U.S. history, it was the most expensive, with the final tab estimated at beyond $200 billion. Chances are good that Florence and Michael could very well be on par, following their rampages through the Southeast and Florida panhandle coasts this hurricane season.

Hurricanes are not alone in their ability to wreak havoc to lives and property. Consider the devastating fires currently raging across the country, particularly in California. Or the tornados that have swept throughout several parts of the U.S. And, of course, those who live in areas prone to earthquakes can talk of massive destruction to their homes and businesses.

Without preparing for the unexpected, your company is left vulnerable to financial disaster. According to the Insurance Information Institute, up to 40 percent of businesses that are forced to cease operations for any length of time because of a natural disaster NEVER reopen. Even if your company is able to physically recover, without appropriate planning to weather a disastrous circumstance, your organization could still face litigation from customers, vendors, or employees seeking damages for negligence.

As unfortunate as it is, not all threats to your business can be avoided. However, by diligently preparing in advance for the POSSIBILITY of the types of threats that could harm your business, you can mitigate many of the risks you face.

 

Preparing for a Hurricane

Hurricanes can develop any time, with the peak season running from June through November. Torrential rains and devastating winds roar along coastal areas causing massive damage to homes and businesses and injury and death to those caught their path.

Preparation is the key to minimizing the damage from a hurricane. Unlike fires, tornados, and earthquakes, hurricanes are slow to develop. Fortunately, the National Hurricane Center is able to identify and monitor tropical storms that could evolve into hurricanes, giving people plenty of warning and time to prepare.

  • Ersi is a world leader in geographic information system (GIS) for gathering and analyzing all types of geographic and spatial data. You can go to www.esri.com/services/disaster-response/floods/latest-news-map.html to monitor flooding in your area.
  • Have your building(s) inspected regularly to ensure they comply with local wind loading requirements.
  • Have impact-resistant film installed in all windows.
  • Prepare a list of contact information for all vendors and individuals who you rely on to operate your business. Consider adding entities outside your area to serve as backups.
  • Develop a list of organizations that can help you following the storm, including debris removal and computer recovery.
  • If you do not already do so, establish off-site computer backup procedures, and back up your data frequently. Move all critical hard copy documents to a secure, off-site location.
  • Develop a chain of command and list of responsibilities in case of emergency and share with all employees.
  • Prepare of list of employees and their contact information, including their locations should they need to evacuate to another city.
  • Prepare a similar list of all of your customers, especially those who would be in critical need of your services in an emergency.
  • Notify all employees and customers of a remote phone number and email address to use in emergency situations.
  • Install emergency backup lighting in all facilities that could lose power due to a storm.
  • Stock the following items at each facility that could be affected by a hurricane: flashlight with extra batteries; battery-powered radio; water in plastic containers; first-aid supplies; non-perishable, non-refrigerated foods

 

Fires, Floods, Tornados, Earthquakes

While floods are often predictable, nobody knows when a fire, tornado, or an earthquake will occur.

However, you can protect yourself, your employees, visitors, and property by taking the necessary precautions.

If you have not already done so, you should develop a written emergency procedures plan for each of your facilities. The plan should be distributed to every employee who works at those facilities. Consider including the following in the plan:

  • Safety and health procedures
  • Evacuation plan
  • Fire protection plan
  • Environmental policies
  • Security procedures
  • Supply chain purchasing and response procedures
  • Closing and communication policy
  • Employee manuals
  • Hazardous materials plan, if applicable
  • Business continuity plan
  • Risk management plan

Good resources to start with are your local fire and law enforcement departments. Invite them to visit your facilities to assess your property and provide you with recommendations to help you develop your emergency procedures plan. 

 

Proper Insurance Coverage

In addition to preparing your property, your employees, and your business operations for disaster situations, the ultimate preparation is proper insurance. When purchasing coverage, remember that your damaged stock and property won’t be the only setback you suffer in a disaster—interruption to your business’ continuity can be catastrophic. Purchase a comprehensive policy that accounts for business interruption and is tailored to your location and specific industry. Taking risk-reduction measures may help cut down your premium or excess.

 

Conclusion

Mother Nature’s wrath can strike at anytime, anywhere, often with little to no warning. And, she’s not alone. As 9/11, mass shootings, and other acts of violence have shown us, terrorism and other criminal activity are also very real threats.

Imagining your business shutting down for any length of time is not something you no doubt care to think about, but reality says it can happen. Preparing for such an occurrence can be a daunting task. But, you don’t have to prepare alone.

For additional resources on managing your business risk, preparing for unexpected disasters, or to ensure you have the correct coverages in place to protect your business, reach out to your VGM Insurance Account Manager today, or contact us at 800-362-3363 or info@vgminsurance.com. We also invite you to check out our portfolio risk management blogs at www.vgminsurance.com/blog.

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