Prentice McIntosh is interviewed by Frank Thomas in this episode of Stephens Viewpoints. Prentice and Frank discuss the steps businesses should take to plan for hurricanes and other disasters, how to recover from disasters, how to drill the disaster plan, and how to obtain appropriate property insurance.
Key Takeaways:
[:31] Harvey, Irma, and Maria really whacked the U.S. last year. Prentice shares statistics. Insured losses are estimated at over $100 billion, with total losses at over $200 billion. The three main forecast centers predict 10 to 16 named storms in 2018, five to nine of those being hurricanes and one to four being major hurricanes.
[1:29] The impacts in 2017 were substantial. Stephens Insurance called their clients in the path of the storms and discussed their disaster recovery plans already in place in relation to the storms that were approaching and advised them to alert their loss adjusters to be at the ready before the storm so they would be at the top of the list.
[2:17] Stephens also advised clients to have building supplies and generators ready off-site, out of the path of the storm, so the impact would be as favorable as possible.
[2:45] A business can build a plan to have in place when a storm is approaching. The plan needs to incorporate all aspects of the business. Besides physical asset loss, it includes finance, human resources, and IT department. Look at how all areas of your business would be affected by a natural disaster and if you’re out of business for a time.
[3:28] Stephens’ Loss Control Group and Risk Management Group can be partners with clients to review their disaster readiness plans as they are being put into place to offer suggestions and to make sure that the plan is as robust as possible.
[3:47] Step 1 is to put the plan in place in writing. Step 2 is to do a tabletop drill. There are a lot of things to learn by going through a drill that you wouldn’t have thought of just writing it out. For instance, you might plan on the nearest warehouse being available to rent but 10 other companies might need to rent the same warehouse. Have a backup.
[4:39] Call your adjusters as the storm is tracking toward you to be at the top of their list. Store generators and building supplies off-site instead of trying to buy them when everyone else is trying to buy them. It’s very important to do the drill so that everyone goes through it. When a disaster happens, it won’t be the first time people see the plan.
[5:37] Both small and large businesses need emergency preparedness and disaster recovery plans. These need to be tailored exactly to the impacts a natural disaster would have on their business. This involves preparing for, reporting, and mitigating any losses that may occur. It’s important to have proper documentation in the event of a claim.
[6:19] As you go through your drill, assign different team members to have responsibilities for different parts of the disaster recovery plan. Team members will be assigned to contact all the employees and see that they’re OK. Make sure you have current contact information for all your employees. This is part of the plan.
[6:49] Make sure you have in your plan your preferred vendors for roof repair, water extraction and others that can help you recover as quickly as possible.
[7:04] Hurricane season runs from June to November. Prentice says there is no good time or bad time to build your plans. Review them early as often as needed, and especially as you make any changes to your business that would affect how you recover from a disaster. Review them at least every six months.
[8:02] At a minimum, reassess your plans annually, but as often as needed for your company.
[8:17] A disaster is a disruptive force. Key areas to plan for are all areas of the business that will be affected. Look at how you can minimize disruption or loss in each area of the business. If you can’t avoid or mitigate the risk, then you need to finance the risk with appropriate insurance coverage.
[9:07] Stephens has a manuscript form; special language built into property coverage that would respond to a natural disaster loss. Obtain the correct coverage that would protect you in the event of a loss and help you rebuild as soon as possible. Prentice stresses the importance of drilling your plans, so no one is surprised. Revise it.
[9:55] Stephens’ Risk Management and Loss Control Groups like to be support team members with the insureds to work with them as they’re building their plan. Stephens does not write the plan for the insureds because there are things only the insureds would know, but they help the insureds to follow best practices as they write their plans.
[10:41] Stephens will tailor insurance coverages that mirror the needs in the loss recovery plan, including business interruption and contingent business interruption for your major suppliers that are affected by the disaster. There are lots of things to look at and tailor into your property insurance coverages to have the best result possible.
[11:30] In the next episode with Prentice McIntosh, Frank Thomas will explore with her the unexpected hurdles that businesses can face when impacted by a hurricane.
[11:39] For more information on this topic, please contact Stephens Insurance at 1-800-643-9691. To listen to more Stephens Viewpoints, check out our website. Insurance products offered through Stephens Insurance, LLC, National Producer Number 8844362. Securities offered by Stephens, Inc., Member NYSE, SIPC.
Mentioned in This Episode: