Filed Under:Markets, Commercial Lines

What businesses can learn from Harvey and Irma before the next hurricane

Part of the roof membrane atop the Everglades Preparatory Academy is peeled away in the wake of Hurricane Irma, Monday, Sept. 11, 2017, in Homestead, Fla. (AP Photo/Wilfredo Lee)
Part of the roof membrane atop the Everglades Preparatory Academy is peeled away in the wake of Hurricane Irma, Monday, Sept. 11, 2017, in Homestead, Fla. (AP Photo/Wilfredo Lee)

In the wake of the disaster that Hurricane Harvey left behind, experts estimate up to $23 billion dollars in damage in just two southeast Texas counties. 

That number reflects market value, rather than total storm damage, and doesn’t include the storm’s total reach. Experts are still calculating the total cost of damage across the rest of Texas and Louisiana.

Whatever it is, it’ll take many business owners — especially those of small businesses — years to rebuild, if they do at all. Over 40% of small businesses don’t reopen after a disaster because they simply don’t have the resources.

If the aftermath of Harvey isn’t enough of a warning to business owners about storms wreaking havoc, Hurricane Irma followed soon after, hitting south Florida over the weekend and working her way north.

Related: 4 steps to help clients' businesses survive a catastrophic event

Irma was the most powerful hurricane on record, but it weakened substantially after making landfall. Still, business owners, particularly in south Florida, are now left assessing the damage.

Here are some serious issues to consider before the next hurricane hits:

 cleans up mud brought in with the storm surge from Hurricane Irma

Chris Stokes, right, cleans up mud brought in with the storm surge from Hurricane Irma with help from his son Chase, 9, at his father's convenience store in Everglades City, Fla., Monday, Sept. 11, 2017. (AP Photo/David Goldman)

Develop a business continuity plan


Harvey put the brakes on the fifth largest economy in the U.S. for a few days — and it’s very slowly beginning to move again.

Obviously, it may not be possible (or safe) to work during a hurricane. However, depending on the effects of the storm, you may be able to resume business at an alternate location — if you’ve planned in advance.

Related: How to create a disaster recovery plan for your business

Before a storm hits, review your employees’ contact information to ensure it’s up to date. It may be a snap to reach people on social media, email, by phone or text, but consider how power outages, cell service and even email servers might be affected by a natural disaster.

In addition to your employees, you should also make sure your suppliers and partner companies are available. If your supply chain is disrupted by the same natural disaster — or another one that doesn’t directly affect you — you might still have to deal with the fallout. Consider contingent business interruption (CBI) insurance to protect against disruptions in your supply chain.

roof membrane of a storage building is peeled away in the wake of Hurricane Irma

The roof membrane of a storage building is peeled away in the wake of Hurricane Irma, Monday, Sept. 11, 2017, in Homestead, Fla. (AP Photo/Wilfredo Lee) 

Get the right types of insurance — and review coverage periodically


Business interruption insurance will cover expenses your business incurs if you can’t operate due to a hurricane or other natural disaster. Review your limits periodically to ensure you’ve got adequate coverage. It’s easy to underestimate what you need to try and save money — in reality, business might resume just a few days after a storm hits, but you could feel the effects long after it.

On the other hand, if your business has been severely damaged, you may need to rebuild. Make sure your business interruption insurance includes coverage for payroll. If you can’t work remotely during the rebuilding phase, you want to ensure that your employees are compensated until they’re able to work again.

Typical property insurance covers the effects of natural disasters like lightning damage or wind damage. But it doesn’t cover damage caused by flooding. Hurricane Harvey dumped an unprecedented 51.8 inches of rain on parts of Houston, which is more rain than the city usually accumulates in a year. 

Many businesses in the storm’s path did not have flood insurance, which means there may be few options for filing flood-related claims. Business owners should look to the federal government’s National Flood Insurance Program, which can issue policies that cover businesses in the event of a flood.

Jessica Newman, from the City of Wauchula cleans up broke tiles from a sidewalk after Hurricane Irma

Jessica Newman, from the City of Wauchula cleans up broke tiles from a sidewalk after Hurricane Irma came through the area Monday, Sept. 11, 2017, in Wauchula, Fla. (AP Photo/Chris O'Meara)

Consider the emotional toll on employees


Your business was hit by a hurricane; that means your employees’ homes were likely affected, too. Hurricane Harvey displaced an estimated one million people. While getting your business back up and running is a priority for you, consider the impact of the storm on your colleagues.

Related: How HR can help following disaster

Following a natural disaster, it’s important to keep the lines of communication open and be flexible with employees as they deal with damage to their homes. Put policies in place before a storm hits that outline how you’ll handle working after the storm. Your employees may need to work flexible hours while they care for kids who aren’t able to go to school or elderly relatives who typically live on their own or at a nursing home or assisted living facility.

A vehicle lies on it's side in the aftermath of Hurricane Irma

A vehicle lies on it's side in the aftermath of Hurricane Irma, Monday, Sept. 11, 2017, in Miami. (AP Photo/Josh Replogle) 

Organize and protect your records


In the days leading up to a forecasted hurricane or other severe weather, you’ll likely want to spend it preparing for physical damage, preparing to evacuate and making sure that your family and your employees’ families are safe. You don’t want to spend it scrambling to organize your policy files.

While most of the information you need is on the web, make sure you know can easily access it from your phone. You might also want to print out backup copies of policies and carry them with you so you can reach out to insurers after the event.

Put your smartphone to use


When it’s time to assess the damage and begin rebuilding, put your smartphone to use. Take pictures and video to capture the damage to your business. As an added measure, take pictures of paper receipts during your rebuilding efforts as a backup. It’s an easy way to help you document your expenses that can contribute to your deductible.

Related: 7 tips to speed business insurance recoveries

These recent powerful storms are a reminder to prepare ahead of time for these types of natural disasters — even if you don’t think it can happen to you. No doubt, some businesses beginning the rebuilding process after Harvey and Irma believed it would never happen to them either. But the storms proved, once again, it’s better to be safe than sorry. 

James W. Gow Jr., CPCU, AU, (James.Gow@corpsyn.com) brings more than two decades of experience at leading national carriers to his role of senior vice president, Property & Casualty Practice for Corporate Synergies.

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