The tornadoes that ripped through Alabama and Georgia March 3, taking lives and destroying structures, brutally announced the arrival of the spring storm season. In 2018, according to the National Weather Service, 30 percent of the most active tornado days in the U.S. occurred in March and April. However, tornadoes have occurred in every month in every state.
When catastrophic storms strike, businesses as well as homeowners can suffer devastating losses. While it is not possible to prevent storms, businesses can take steps to prepare for the worst. These include minimizing the opportunity for property damage, preparing employees to act, creating a business continuity plan and working with an experienced broker to make sure the appropriate insurance coverage is in place before it’s needed.
Minimize the Opportunity for Property Damage
During windstorms, dead trees, weak structures and unsecured materials on business property can become airborne hazards. Reduce these risks with preventive maintenance and a thoughtful approach to storage.
Consider installing roof strapping, if possible, and add supports to brace weak areas in structures. In certain areas of the country, businesses might want to consider installing impact-rated windows.
Prepare Employees to Act
Where should employees go if a tornado warning is issued? Make sure the shelter area(s) is safe and large enough to accommodate everyone. Put emergency supply kits in place, and refresh the contents as needed. The Federal Emergency Management Agency (FEMA) and the U.S. Small Business Administration offer an emergency supplies checklist for small and large companies to consider.
Next, create an emergency action plan that answers the following questions:
- Who will be responsible for monitoring the weather?
- Who will signal the warning? When? How?
- Where should employees go if the alarm is sounded?
- Who is responsible for ushering visiting clients, vendors and other guests to the shelter area?
- How will you know that everyone is accounted for?
- Who will declare when it is safe to leave the shelter?
Finally, make sure employees know about and understand the plan. Conduct tornado drills until the plan becomes second nature. Reinforce the importance of taking every warning seriously and acting quickly; it could save lives.
Create a Business Continuity Plan
A business continuity plan, also known as business interruption plan, describes how a business intends to operate with as little downtime as possible after a disaster occurs. The planning process typically involves bringing together key organizational members from various disciplines to identify potential risks and their likely severity, assess their impact on essential business operations, prioritize recovery operations, and create detailed recovery plans for those operations. Once the team has created a workable, fiscally responsible plan, two steps remain: making sure the plan works (testing) and making sure the plan continues to work (refreshing). Learn more about continuity planning here.
Continuity planning can be a big commitment of time and money. However, it’s easier and less costly to protect a business if planning and risk mitigation take place before disaster strikes. As an added benefit, insurance underwriters appreciate proactive readiness related to emergency needs, and that appreciation can be reflected in a positive impact on coverage costs.
Involve Your Insurance Broker
An experienced broker helps business leaders understand and plan for the impacts of catastrophic weather. Talk with your adviser to understand what is currently contained in your business property policy and look for coverage gaps. Walk through the post-storm claim process to understand ahead of time what to expect and review the steps to take. Discuss how to calculate pre-loss business value ahead of a disaster for the purpose of putting the right business interruption insurance in place. Also, ask about the potential benefits of having ordinance or law coverage.
To review your business property coverage and learn more ways to manage risk, contact your Hylant service team leader or your local Hylant office.
The above information does not constitute advice. Always contact your insurance broker or trusted adviser for insurance-related questions.