Disaster Recovery and Contingency Plan

October 2015

Hurricane Joaquin and Catastrophic East Coast Flooding Remind Businesses to Take Precautions 

Though spared the full brunt of Hurricane Joaquin, the East Coast is still reeling from significant damage. By Monday, October 5, the powerful Category 4 hurricane that briefly hit peak wind speeds of 155 mph ‒ just 2 mph shy of Category 5 status ‒ was downgraded to a tropical storm. The long reach of the storm, however, still devastated communities across New Jersey and Georgia, and caused fatalities in the Carolinas. More than 30,000 people across South Carolina were without power by the end of the weekend, as Hurricane Joaquin contributed to nearly 18 inches of rainfall in less than 24 hours in some areas. The rainfall, topping 20 inches in many locales by Sunday night, caused the most devastating flooding the capital city of Columbia, South Carolina has ever seen.
The damage and loss of life Hurricane Joaquin left behind along the Eastern Seaboard is a sobering reminder of the urgent need for businesses to prepare disaster recovery and contingency plans, as the 2015 hurricane season is not over. Joaquin is the third of four hurricanes predicted by the National Oceanic and Atmospheric Agency (NOAA) during this year’s Atlantic hurricane season, which extends into November. With many areas of the country still highly susceptible to significant storm damage, the lessons to be learned from Joaquin and other past storms loom large.
Hurricanes, named storms and other forms of severe weather can damage businesses of all sizes. Employees’ safety is at risk, assets are vulnerable and business can be disrupted or even shut down entirely. Business owners and risk managers also face the prospect of navigating complex property and business interruption insurance claims.
As businesses across the region impacted by Hurricane Joaquin and the accompanying rainfall begin the difficult process of evaluating the damage and cost of rebuilding, BDO Consulting shares its top five tips for coping with disaster recovery and filing insurance claims.


  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 (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, 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 about what a business can do in the event of a natural disaster, please contact Clark Schweers, Principal at BDO Consulting and head of the Forensic Insurance & Recovery (FI&R) practice, at [email protected].