With meteorologists predicting an active 2011 hurricane season, now is the time to begin preparing your policyholders on ways to protect themselves and their property. It is also important that insurance companies located near vulnerable coastlines prepare.
The National Oceanic and Atmospheric Administration (NOAA) predict that the 2011 Atlantic hurricane season will be a busy one. NOAA expects 12-18 named storms. Of those, 6-10 are expected to become hurricanes with winds in excess of 74 mph, and 3-6 are predicted to become major hurricanes, category 3, 4 or 5 with sustained winds of at least 111 mph.
1. Protect Your Employees: The most important resources you need to safeguard are your employees. Employee safety should always come first. In preparation of hurricane season your employees should be made aware of what to do in the event of a hurricane warning, be familiar with your business recovery plan and know how to communicate with you once the storm passes.
2. Update Your Business Recovery Plan: It is critical that businesses located near a coastline, one that frequently receives hurricane watches and warnings, update their business recovery plan annually. Having a good business resumption plan in place, one that you have rehearsed and tested, and shared with your employees, may make the difference between your business making a full recovery or having to shut down.
3. Communications Plan: As part of your business recovery plan businesses of all sizes need to have a plan in place to communicate with your employees, key vendors and customers when a hurricane warning is issued and more importantly, after the storm has passed.
Employee Communication. Establish a clear process for communication with your employees and plan how you will contact one another in different scenarios. For example, many businesses have a pre-arranged rendezvous point or a time for employees to contact their supervisor following a storm.
If damage is severe employees may need a photo ID and letter of authorization allowing them to bypass authorities and enter the business. Preparing these documents in advance is highly recommended.
Key Vendors and Customers. In preparation for hurricane season, it is important to update your business contact list, and distribute a hardcopy and electronic version to all key staff members. It is also important that you communicate your plan with your vendors and customers so they know how to get in touch with you following a storm.
4. Backup Data: One of the most important aspects of the recovery process is to have your data available to restore when the storm has cleared the area. Prior to a hurricane making landfall make a backup copy of your critical data and leave it in a safe place that you can easily get to, such as a waterproof safe, or have it moved to an alternative location.
5. Document Your Office & Contents: Just as you advise your policyholders to prepare for hurricanes by making a visual record of their homes and its contents, insurance companies need to do the same thing. A visual record of your office and its contents using a digital camera or video recorder should be made prior to any major storm making landfall. This will help you to document your claim in the event of damage or a complete loss.
6. Safe Guard Important Papers: It is vital that businesses safeguard important business papers such as deeds and insurance policies from damage. Important business papers should be placed in a safe, waterproof place or moved to an alternative location where you can easily access them.
7. Alternative Power Source: Often times following a hurricane power is cut off and in some cases it may be weeks before it is restored. It is critical that victims of a natural disaster be able to locate and receive assistance from their insurance company. An investment in a generator and enough fuel to run it for two weeks is highly recommended. Testing of your emergency equipment to ensure that it is working properly prior to hurricane season is also recommended.
8. Alternative Location: In 2005, following Hurricane Katrina many Gulf Coast businesses found themselves unable to return to their offices for weeks or months due to mandatory government evacuations or because their offices were destroyed or badly damaged. Your business recovery plan should take this scenario into consideration and an alternative business location, one that your employees are aware of and can access, should be arranged in advance.
9. Alternative Communication Methods: In the aftermath of Hurricane Katrina one of the biggest problems facing businesses was the lack of communication. Power, Internet service, telephone and many cellular towers were knocked out during the storm. A satellite phone for key staff and portable Internet devices are a good investment anytime but could be critical as you business recovers and you strive to continue to provide your policyholders with services.
10. Review your Insurance Coverage: Even insurance carriers need to review their coverage on a regular basis. Just like any small business, insurance companies need to obtain business interruption insurance and ensure that they have adequate flood insurance in place.
No one wants to be the victim of a hurricane, a tornado or other natural disaster. For companies located near a vulnerable coastline, hurricanes are a reality that cannot be ignored. By planning and making preparations in advance you give your business the best possible chance of making a full recovery and continuing to thrive in the aftermath.