With the 2017 hurricane season officially launched on June 1, we can look forward to a more than average hurricane season if you believe the forecasters. Each modeler for the 2017 season is indicating some version of the following:
- 11-17 Named Storms
- 4-9 Hurricanes (Can be Category 1 and above)
- 2-4 Major Hurricanes (Category 3 and above)
With continued advances in modeling and predictability management, we look for state governments to take a more active role in the response efforts. State emergency managers will likely be ordering mandatory evacuations well in advance of the storms landfall, and directing utilities to shut down the substations early.
So what does this mean to businesses? First and foremost, a Disaster Response Plan should be dusted off and revisited now. If you haven’t looked at it lately, have a team verify accuracy of any and all response points and practice the response. If your company does not have a Disaster Response Plan, create a virtual response plan that can be easily rehearsed. If your organization is not certain which path is best, check with your insurance broker for help. In addition, the Insurance Information Institute has on-line resources to assist in planning a response. Experience tells us that the first week after the storm is a frenzy of activity and disorganization. Your company will benefit from advance planning now.
It’s also important to revisit the insurance policy, understanding the contract and its coverage response to a significant weather event. An all-risk property insurance policy will cover exposure to and damage from perils of risk, and ensuing time to make those damages whole. The policy will also respond to the loss of business associated with the time it takes to repair the physical damages from the peril insured against. It’s critical to know that a “hurricane” is not necessarily insured, but rather what is insured is:
- Flood, storm surge, other boundaries of water intrusions (if purchased)
- Wind damages from storm (if purchased)
- Utility Service Interruptions (if the cause of the interruption is insured)
- Evacuations by Civil Authorities (State and Local governments)
- Ingress & Egress coverage (lack of access to your facility)
- Business profits and fixed costs lost due to insured physical damages
- Extra Costs spent to keep business viable
Remember, the property insurance policy is not designed to cover it all. Be mindful of the contract. Talk to your broker about the coverage and make sure you understand. The asset belongs to you the policy holder.
After the storm, report the loss. Follow your response plan and let your broker assist in management of the insurer and their representatives. On any given loss there could be as many as 5-6 insurance people at your location asking for information. Communicate often and track information. Most importantly, be safe.