With storm season looming, these preparation tips can help risk professionals ensure business continuity, keep employees and property safe, and promptly file insurance claims for maximum financial recovery:
1. Review All Insurance Policies
Thoroughly examine your commercial property, business interruption and other relevant policies for hurricane season. Make sure that all corporate locations and assets are accurately listed. Confirm coverage for wind, flood and storm surge, and pay particular attention to any applicable deductibles, sublimits and exclusions. Proper and prompt notification is a key part of filing successful insurance claims, so carefully review each policy to confirm your insurer’s requirements for initial notice and the usually hard deadline for sworn proof of loss.
2. Fortify Physical Assets
Develop and update plans to secure facilities and equipment against hurricane-force winds and potential flooding. When major storms form, fortification materials can be tricky to source, and this can be further complicated by supply chain challenges. Make sure your organization has the essential materials on hand to rapidly implement protection plans, reinforce structures and secure the premises.
3. Map Out Business Continuity and Financial Impact Scenarios
Beyond general disaster recovery, examine how a hurricane could affect specific operations and financial flows, including potential revenue losses and extra expenses. Outline these impacts for different potential disaster scenarios. Establish protocols for tracking potential revenue losses and extraordinary expenses in a format that will be suitable for insurance claims. If complex financial recovery is a significant concern, consider proactively identifying and pre-qualifying experts to assist, like forensic accountants.
4. Assess Supply Chain Resilience
Actively engage with critical suppliers and vendors to understand their hurricane preparedness plans. Identify and, if necessary, establish relationships with alternative sources or delivery methods to minimize potential operational disruptions.
5. Reassess Property Valuations and Replacement Costs
It is critical to reevaluate your property’s current valuation and estimated replacement costs. Persistent supply chain challenges and inflation have significantly increased material and labor costs. Underestimating these costs could lead to substantial underinsurance that prevents your organization from securing full recovery after a loss. Make sure policies reflect updated valuations to guarantee adequate coverage for rebuilding or repairs.
6. Centralize and Secure Key Records
To help minimize operational interruptions, ensure key documents are available remotely, such as in off-site and cloud-based storage. Create and test a system for securely storing and easily accessing all critical corporate records, including insurance policies and financial ledgers, as these will be key in filing prompt and detailed claims after a disaster.
7. Document Covered Property and Assets
Capture pre-loss photos or videos of your property and make sure they are available in off-site or cloud-based storage that will remain accessible if you are forced to close or operate remotely. This is a convenient way to document the condition of covered property and aid claims.
8. Test Emergency Communication Protocols
Develop clear communication plans for all stakeholders, both internal and external, to ensure you can stay in touch with employees and leaders in different disaster scenarios. These plans should include multiple communication channels and define clear roles and responsibilities for incident response. Practice these protocols before a storm to ensure everyone knows their role and can act effectively under pressure. Depending on the nature of the business, consider whether you also need protocols for communication with customers or key business partners.
9. Update Employee Contacts
Verify all employee emergency contact information is current and easily accessible. Collect these details across multiple modes of communication. In the wake of a disaster, power outages and service interruptions may make it impossible to use or charge mobile devices, so plan for backup options that will not be offline. Communicate clear safety protocols, evacuation procedures and return-to-work guidelines to your entire workforce well in advance.
10. Maximize Insurer Resources
Insurers and brokers have introduced new tools to help policyholders monitor, assess and prepare for natural disaster threats. For example, some insurers offer advanced modeling that can be customized to clients’ property portfolios, calculating concrete value at risk for different storm path scenarios. They may offer briefings with meteorologists before storms or customizable client alerts that can be triggered for different audiences and at various points in the storm cycle, such as notifications about increased activity for claims teams or updates for regional managers in a storm’s path. Whatever carrier or broker you use, make sure you explore your options and are not leaving tools on the table.