How to help your clients with a disaster plan, to minimize risk before the next natural catastrophe

This article first appeared on our Tribal Program website. It has been modified to better fit the needs of our small-to-medium business clients.

Hurricanes along Atlantic states. Fires in California and Colorado. Floods in the Carolinas. Earthquakes in Oklahoma. And that’s just this month. No matter where your clients are located, there’s always the potential for a natural disaster. That’s why it’s crucial to prepare ahead nature’s next curve ball, with a business disaster plan. It’s their strategy for being prepared.

Last year, more than 10 million acres burned in wildfires, compared with 5.4 million in 2016, according to Insurance Information Institute. Also in 2017 were two of the top 10-ranked significant flood events over the past 12 years (Hurricanes Harvey and Irma). So far this year, there have been 456 tornadoes in the U.S. alone. All add up to one truth: It pays to be prepared for a natural disaster with a business continuity plan, so that your commercial client is better positioned for recovery.

We’re offering solutions that will be applicable to all types of Mother Nature’s temper tantrums. Some will be applicable to your locations; others will not (floods vs. fires, for instance). Still, here are 10 ways you can help commercial clients plan ahead to minimize risks, with a disaster plan.

1. Identify hazards 

As in any risk assessment plan, help your clients first identify their hazards. What is stored in an open yard that will be damaged? What is their risk of fire, whether from natural or man-made sources? How about their risk of flood? If they’re in an earthquake-prone area, what steps can they take to secure their building and its contents? If the disaster occurs during work hours with little-to-no-warning, how will they provide for staff?

2. Check insurance coverage

Now’s the time they need to confer with you to ensure they’re covered for natural calamities occurring most often in their area. According to Florida’s Office of Insurance Regulation (as reported in PropertyCasualty360), Hurricane Irma impacted 90,000 businesses and 58,000 commercial properties. Many received the insurance coverage they expected; others found out the hard way that they didn’t have the coverage they assumed they had.

Be sure to ask if they've made improvements to the property, added new equipment or increased inventory. Explain that yes, it may slightly increase their premiums, but otherwise, these enhancements may not be covered without an increase to policy limits.

Remind them to consider additional flood or earthquake insurance, if they’re in a flood or earthquake-prone area. Explain that typical property insurance policies exclude these, so additional coverage may be needed.

Also consider adding business interruption insurance, which helps cover payroll and the lost profits that would’ve been earned, based on their sales records, had the disaster not occurred. It also helps pay ongoing operating expenses that continue, even though they’re temporarily not in business. Our new Arrowhead Advantage BOP includes coverage for business interruption.

3. Have a communication plan in place

We’ve discussed this in length in an earlier blogpost, Do you have a business continuity plan?Provide your clients with a link to this article for tips on compiling a list of important phone numbers; how they’ll contact employees, customers, suppliers and more. It's also a good idea to file a copy of their business disaster plan with local law enforcement officials so  they're better equipped to aid you in case of emergency. And once they’re back in business, they’ll want to quickly – and continually – communicate via social media and other channels appropriate for your tribal business.

4. Train employees

Included in their written plan should be two sections: one for evacuation, and one for sheltering-in-place.  Employees should be trained on all procedures. For more details, see Put emergency plans in place during National Preparedness Month

5. Protect computer data

Important records and papers should be duplicated and stored in a secure (offsite) location. Use a data storage firm that offers offsite and online backups of computer data. Update back-ups regularly.

6. Decide how to strengthen the supply chain

Disruptions may occur their supply chain, so it’s crucial to include these risks in their business disaster plan. They may be cut off from vendors who supply critical inventory and supplies. They may be unable to distribute or sell their goods, due to the simple fact that customers can’t get to them temporarily (or longer). All create a crucial issue, quickly draining financial reserves and weakening customer relationships. What’s your client's Plan B, in case of an emergency?

7. Identify critical business activities

If you client cannot afford to shut down operations temporarily, what will they need to run the business elsewhere? What resources need to be on hand? What alternative facilities, supplies or equipment can they use? Help them to consider a reciprocity agreement with another business: If they’re temporarily out of commission, they can conduct business from the alternate location. And if the reciprocating business is badly damaged, your client agrees to allow them to use their facilities.

8. Identify the contractors and salvage specialists to work with

Now – before a disaster – is a good time for your client to vet any contractors that will be needed in the event of major damage. You as their agent may be able to recommend several options. Suggest that they meet these business owners ahead of time to solidify their business disaster plan.

 

Using a business disaster plan after the event:

9. Photograph & document damages and temporary repairs

Although your client's first impulse is to protect their property from any further damage from the elements, the first thing they'll need to do is quickly snap some photos or video with a smartphone, showing as much detail of the damage as possible. Also, help them understand now – ahead of time - what temporary repairs are covered so that they’re not unwittingly impeding their claim. Remind them to keep records (and take photos) of temporary repairs made prior to meeting with the adjuster.

10. Protect workers

Typically, cleanup and recovery operations fall to your business owner client and his or her employees. Instruct them to minimize hazards to their team as they begin clean-up to get back to business. Before anyone gets started, communicate any dangers and hazards to watch for. This may include downed power lines, wildlife taking refuge in the structure, standing water which may mask other issues, structural damage or chemical spills.

They should be dressed appropriately for the hazards: hard hats, safety glasses, heavy work gloves and sturdy boots or shoes. Your client should provide water and ensure the group takes frequent breaks. If chemical spills or animal or human waste is present, provide disinfecting solutions to be used prior to eating/drinking and at the end of the shift. Workers should also be trained in the proper use, cleaning, decontamination and maintenance of personal protective equipment. First aid kits should be on hand to quickly attend to any issues.

If they’re using a generator, it should be adequately vented. Using power tools? Their electrical supply should be equipped with GFI protection. Guards and safety devices should be in place for all equipment, such as chainsaws. Avoid using extension cords in wet areas.

 

Resources:

https://www.zurichna.com/en/knowledge/articles/2017/12/post-disaster-recovery-keeping-your-workers-safe
https://www.propertycasualty360.com/2018/07/02/learning-from-hurricane-irma-properly-insuring-and/ https://www.iii.org/research-data/catastrophes https://www.zurichna.com/en/knowledge/topics/severe-weather https://www.thesilverlining.com/safety-resources/tips-to-help-avoid-losses/commercial-business-tips/can-your-business-survive-a-natural-disaster-
http://www.inguard.com/blog/3-tips-on-how-to-protect-your-business-against-natural-disasters
https://www.thesimpledollar.com/protecting-your-business-from-natural-disasters/ https://www.fema.gov/media-library/assets/documents/13232