With this year predicted to have above-average hurricane activity, businesses in affected areas must be prepared for potential disasters. The Federal Emergency Management Agency reported that 40 percent of businesses close permanently after a disaster. About 25 percent of the businesses that do reopen after a disaster do not survive for more than a year. The Insurance Institute for Business and Home Safety and the Insurance Information Institute offer these helpful tips for businesses to survive a hurricane.
- Have A Continuity Plan
The IBHS provides a free tool for creating a continuity plan. A plan must address what will happen after a disaster occurs. Employers must communicate the plan with staff to ensure that they understand their roles. Assigning responsibilities to key personnel for further delegation is important and workers should be trained as well. Conducting regular drills will help improve their responses.
- Keep An Updated Inventory
All office supplies, electronics, machines and other equipment should be documented in an inventory. If the company has vehicles, those must be included. As items are bought or discarded, update the inventory. If possible, take photos of all machines, equipment and other major purchases.
- Protect Important Information
Many businesses still use flash drive or CD-ROM backup, and some companies only keep paper copies of certain documents. All important documents that are vital to the company’s survival should be scanned and stored outside of the business. Cloud storage offers convenient and efficient solutions for large or small digital storage needs.Paper copies of client information, insurance policies, vendors, employee information and critical financial documents should be kept in a safe and insured place. However, any physical backup site should be safe enough or far enough away from the company that a hurricane could not destroy it. Some smaller businesses use safety deposit boxes at banks. IBHS provides a free toolkit with a checklist for information safety steps to take when a disaster is likely or imminent.
- Update Insurance Coverage
Flood insurance is not included in a business owner’s policy. Any business in a high or moderate risk zone should have flood insurance. Although some private insurers offer flood coverage, most home and business owners purchase it from the government’s National Flood Insurance Program.Review all business insurance policies each year before the beginning of June which marks the start of hurricane season. The policy should be updated as necessary to include new items or accommodate business growth. BOPs include liability and property coverage, and commercial policies are more comprehensive.
Multi-peril policies are optional but offer great value for multiple items such as commercial auto, inland marine and more. Business owners should choose replacement cost coverage instead of the cash value option with their BOPs. This ensures that rebuilding is covered even if assets or structures have depreciated. Business owners who lease their work space benefit from tenant coverage. A tenant policy covers machines, furniture, supplies and merchandise belonging to the business owner. The building itself and any fixtures are the responsibility of the building owner.
Most businesses that do not reopen after a hurricane’s destruction were never properly prepared. As a business owner, you should learn more about preparedness. Call us today to review your coverage.