The 2017 hurricane season was a brutal reminder that we need to be prepared every single year for a major hurricane to make landfall, even if forecasters suggest things will be quiet.
Hurricanes Harvey, Irma and Maria remain fresh in our minds throughout National Hurricane Preparedness Week 2018 (May 07-13). In line with this week’s national theme, Insurance Business spoke to Andrew Higgins, technical manager at Allianz Global Corporate & Specialty (AGCS) to get his five top tips for hurricane preparedness for business entities.
“The first thing we advise clients to do is test and update their emergency preparedness plans. Those plans specifically address how businesses respond to a hurricane,” Higgins told Insurance Business. “We want to make sure the plan is comprehensive, that it’s in writing and that they test it on an annual basis. If businesses do those things and keep their plan up to date, they can really reduce their damage and downtime in the event of severe weather.”
In order to create an effective emergency preparedness plan, businesses need to understand exactly what their storm-related exposures are. Multiple events can occur within a hurricane, including things like high winds, storm surge and inland flooding. Some facilities will be susceptible to all three and some will be exposed to only one of those perils. Each exposure demands different preparation - therefore businesses need to be clear about what risks their facilities are susceptible to.
As well as understand the risks, insureds also need to fully understand their property insurance policy, especially in terms of what’s not covered, Higgins explained. If there are gaps, insureds should discuss with their broker how to fill those gaps, or at least gain a better understanding of their policy.
“We also tell our insureds to make sure they review and update their business contingency plans, because it’s crucial to get back up and running as quickly as possible following an event,” Higgins added. “Even if a company has an excellent emergency preparedness plan, there are a number of things that could happen as a result of a hurricane that could cause business interruption losses, such as loss of power and displacement of the workforce. Having a business contingency plan is critical to enable an impacted company to get back up and running as quickly as possible.”
Another thing insureds can do is make improvements to their buildings and work sites to help mitigate the risks of high winds, high water or any other event associated with hurricanes. AGCS gives recommendations on how to strengthen the building envelope (roof, windows doors, etc.) to enable business clients to withstand high winds and flooding.
“Hurricane exposures like wind and flood aren’t things businesses just have to sit there and take. They can actively improve their facilities to make them more storm resistant,” Higgins commented. “Insureds can also do things like add an emergency generator to protect against sudden loss of power, raise or move critical equipment above anticipated flood levels, and install things like floodgates around the building.”