Five steps to boost storm resilience

By putting the following procedures in place, businesses can have a better chance of withstanding and recovering from an extreme weather event:

Update and test your emergency preparedness plans: Preparation before the storm minimizes property damage and reduces business interruption. Ensure your business has a comprehensive written emergency response plan for extreme weather events, including high winds and floods. A good plan has the support of senior management, site-specific recommendations and clear delineation of responsibilities.
Test and update business continuity plans annually: The crucial role of business contingency plans has become more apparent as a result of recent natural catastrophes. Superstorm Sandy hit the Northeast on a Monday, which made it difficult for employees to develop and implement business contingency plans while preparing their homes and families for the storm. A well-developed contingency plan provides businesses with the tools to get back up and running as quickly as possible.
Understand your insurance policy: Business owners should take the time to read their current policy and discuss with their brokers what is covered and where there may be gaps. Determine if the limits of liability are in line with the current dollar value of the cost to repair or replace the damage. Consider adding an extended period of indemnity clause to the business interruption coverage to support the business until it returns to its pre-loss financial condition.
Know what to prepare for: Planning for a wind event involves different preparation than planning for flooding. In the case of Superstorm Sandy, the majority of preparation was based on a high wind event, leaving many businesses unprepared for the flooding caused by the storm surge. As more sophisticated tracking models are introduced, more accurate information will be available.
Consider making improvements to the building and site: The following enhancements could help your business withstand the high winds and flooding that can accompany a windstorm:

Emergency generators for loss of power.
Floodgates and flood doors.
Raising critical equipment above the highest anticipated flood levels.
Protecting the building 'envelope' from high winds (this refers to the physical boundaries between the interior and exterior of a building, such as the roof, windows and doors). This could include measures such as using impact-resistant doors and glass, or providing additional securement of the roof covering system to the roof deck.

The question is not whether an extreme weather event will affect a business but when. Extreme weather event losses will continue to rise with climate change, higher property and asset values, more complex supply chains and changes to exposures (such as increasing economic activity in natural catastrophe zones). Soaring inflation will only challenge claims costs further. Property and construction insurance claims, in particular, are exposed to higher inflation, as rebuilds and repairs are linked to the cost of materials and labor, while shortages and longer delivery times inflate business interruption values.

Thomas Varney of Allianz Global Corporate & Specialty. (Credit: Courtesy photo)

Special Reports /

Are businesses prepared for another Superstorm Sandy?

Related Stories

Recommended For You