Getting Back to Business After a Natural Disaster
Coastal states from Texas to Georgia and surrounding tropical islands are reeling following Hurricane Harvey and Hurricane Irma. Now individuals and businesses are gearing up for recovery and bracing themselves for potential follow-up storms. As businesses assess damage and move toward reopening, there are several risk management factors to keep in mind following these storms, and to prepare for future events.
When the threat of natural disaster looms, insurance is always top of mind. Liability, property and equipment insurance can help to protect against these events. Restaurateurs make large investments in kitchens in terms of specialized equipment for food preparation, refrigeration and sanitation. Whether it’s a small flood or a Category 5 hurricane, property and equipment insurance can minimize the impact to your operations and help put your mind at ease.
The first several weeks following a big storm, businesses that are properly covered by insurance are likely beginning to check off steps on their emergency preparedness checklist. Those that don’t have developed contingency plans, or are noticing gaps in their path forward, should consider incorporating the below next steps for coping with disaster and picking up the pieces.
1) Communicate with employees and external stakeholders.
Following the activation of an emergency preparedness program, it is critical to communicate with employees and business partners about their well-being, as everyone will be dealing with potentially significant, or even devastating, personal and professional issues.
2) Review your insurance policy.
Even if a business does not suffer physical damage, it may have coverage for business interruption losses. For example, if a business’s customers or suppliers have been flooded and cannot receive the business’s goods or services, the insurance policy may include what is referred to as “Contingent Time Element coverage.” Non-physical damage coverage for business interruption losses can also include lack of access to facilities (e.g., road closures), government declarations of emergency, cancellation of events or loss of utilities, among others.
3) Maintain contemporaneous documentation.
To say that the hours and days after a disaster are hectic is an understatement. This is a trying time for businesses as they try to rebuild and recover. However, keeping careful records even during this time of disruption is critical. Email traffic around current market conditions and cancellations of sales or suppliers/customers being impacted is critical to preserve, as it is extremely valuable to a business interruption claim.
4) Get the right team on your side.
A major property claim can take several months to resolve, and the complexity of the issues that may arise requires external experts to look out for a business’s interests while management focuses on what is important—rebuilding and recovering.
5) Establish milestones for claim recovery.
Following a major catastrophe, resources are often stretched thin. It is important to create milestones and hold all members — from the adjusting team to internal stakeholders — accountable for achieving those goals.
For more information on how businesses can prepare in the event of a natural disaster, contact Clark Schweers at [email protected]
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