Make Your Business Hurricane-Resistant
Forecasters at NOAA’s Climate Prediction Center anticipate a very active Atlantic Storm season this year with 14-19 named storms. This prediction surpasses the Atlantic Basin’s 30-year historical average (1981-2010) of 12 named storms, six hurricanes and three major hurricanes– we have already seen the disastrous effects of Hurricane Harvey in August.
The Federal Emergency Management Agency (FEMA) reports that 40% of businesses do not reopen after a disaster and another 25% fail within the following year. Small businesses are particularly at risk because they may have all of their operations in one location that is damaged or destroyed.
It is more important than ever to make a survival plan for your business, here’s how:
- Identify the risks most likely to disrupt your business.
- Identify the activities essential for staying in business and recovering quickly.
- Maintain current staff contact information and share communication plan with all employees before a disaster strikes.
- Prepare contact lists for suppliers, vendors and key customers, be ready to communicate “business as usual” messaging after a disaster.
- Inventory and document your IT system including hardware, software, digital data and connectivity. Implement frequent back-ups, off-site storage and restoration options.
- Create a post-disaster financial strategy and review all insurance coverage.
- Establish communication channels with community leaders, public safety organizations, local government agencies and utility companies.
- Keep your plan current; recognize that your organization and environment around it are constantly changing.
The Insurance Institute for Business & Home Safety® offers a free business continuity toolkit, OFB-EZ® (Open for Business-EZ) designed to help even the smallest business plan for any type of business interruption. The OGB-EZ® Mobile App guides users through evaluation checklists to help business owners understand their risks. Additionally, EZ-Prep provides a severe weather-planning guide.
Maintain Key Information Offsite
To get your business up and operating as quickly as possible after a disaster, you’ll need to be able to access critical business information. In addition to backing up computer data, keep other critical information offsite such as your insurance policies, banking information and contact lists. If you have a back-up site, make sure it’s sufficiently far away so as not to be affected by the same risks that threaten the primary location.
Create a Business Inventory
Include all business equipment, supplies and merchandise—and don’t forget commercial vehicles.
Review Your Insurance Coverage
The time to review your insurance policy is before disaster strikes and you have to file a claim. It is important that your business have both the right amount and type of insurance for its needs and risk profile. There are two types of policies you can buy as a business owner:
- A Business Owner Policy (BOP) is commonly used by small businesses. BOP policies combine property and liability coverage in one policy and are usually less comprehensive than a commercial policy.
- A Commercial Multi-peril (CMP) policy combines several coverages—such as commercial property, liability, inland marine and commercial auto—into a single policy. It is typically less expensive to buy a CMP policy than to buy the coverages individually.
Opt for Replacement Cost Coverage
Most commercial property policies provide either replacement cost coverage, actual cash value coverage, or a combination of both. Replacement cost coverage will pay to rebuild or repair property, based on current construction costs. Actual cash value coverage will pay to rebuild or replace the property minus depreciation. Depreciation is a decrease in value due to wear and tear or age. If your business is destroyed and you only have actual cash value coverage, you may not be in a position to completely rebuild.
Don’t Forget About Flood Insurance
Flooding is not covered by standard commercial insurance policies, so consider buying a separate flood policy. If you’re located in a high- to moderate-risk flood zone, you could be protecting your business from devastating financial loss.
Consider Tenant Coverage
If you rent or lease a building, consider tenant coverage, which will insure your on-premises property, including machinery, furniture and merchandise. The building owner’s policy will not cover your contents.
Dwyer Insurance ©2017