Frank Thomas interviews Prentice McIntosh, continuing and concluding the conversation on hurricane preparedness in this episode of Stephens Viewpoints. Prentice and Frank discuss steps businesses should take after a hurricane. They focus on getting back to the property and meeting the claims adjuster as quickly as possible, putting in place temporary fixes to mitigate future losses, and revisiting the disaster recovery plan to make sure all aspects of the business are protected.
Key Takeaways:
[:24] The previous two episodes, Part 1 and Part 2 of this conversation, covered how businesses can prepare ahead of a hurricane and during a storm. Today, we look at how businesses can deal with the aftermath of a storm.
[:41] Oftentimes during a major storm, businesses have to shut down, which can, in turn, impact the company’s revenue, staff members’ employment, and inventory. It goes back to having the natural disaster or hurricane preparedness plan. It’s important to begin to rebuild and fix the damage as quickly as possible.
[1:16] Contact any suppliers and vendors that you need to get your product back in line or to halt production for a period of time. Having things, like building supplies, prepared ahead of the storm so you’re not faced with inflationary pricing after the storm can greatly lower the cost of a potential claim.
[1:45] Have generators and fuel for the generators ahead of the storm. Fuel can be scarce or much more expensive post-storm. Thinking through those things ahead of the storm can help you lessen the impact of the storm after it’s over.
[2:08] In the last episode, Frank and Prentice talked about the 40% of small businesses that never reopen after closing for a hurricane. How can a business rebuild to ensure that this does not happen to them? Once you are allowed back on your property, assess the damages and make any immediate temporary fixes you can to minimize future loss.
[2:46] Document and photograph everything, including temporary fixes. As a Stephens Insurance customer, you will have been in touch with Stephens before and during the storm and loss adjusters will already be engaged and en route to see your property as quickly as possible to get you to the rebuilding phase and reopen as quickly as possible.
[3:17] Sometimes, lessons learned are the best way to revise your disaster recovery plans. Even after planning and running tabletop drills, testing your plan through a storm is the best way to reveal potential gaps to fix for the next disaster. Look back and see what you missed, so the next time you will be prepared even better.
[4:07] Stephens Insurance calls their clients proactively to advise them when a storm is tracking toward them, so even a business without a formal plan in place can take necessary precautions prior to that storm making landfall.
[4:54] If a company gets into the middle of a storm and they still don’t have a plan, they should call Stephens and the risk management, loss control, and claims departments will help them the best they can to mitigate loss and help them through that process.
[5:16] You need to look at all aspects of your company, from accounting to human resources, to IT, to suppliers — all aspects, so after the storm, Stephens and you can start over looking at all those areas of your business and help build a plan around any potential losses to any of those areas of your business.
[6:20] Not everything can be mitigated or avoided, so at that point, you would look to purchase insurance to cover those losses. That’s where Stephens Insurance can really be a team member for you to dovetail your insurance coverage and make sure all of your potential losses are potentially covered.
[6:52] Stay tuned for more insights from the Stephens Insurance team in the near future.
[6:56] 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:
Frank Thomas interviews Prentice McIntosh, continuing the conversation on hurricane preparedness, in this episode of Stephens Viewpoints. Prentice and Frank discuss steps businesses may take to cover the business disruptions that come with a hurricane. These can include a storm safety plan, disaster recovery plans, business interruption coverage and contingent business interruption coverage.
Key Takeaways:
[:41] According to FEMA, almost 40% of small businesses that close during a disaster never reopen. How can a small business plan ahead to fight these odds?
[:52] A hurricane preparedness or natural disaster plan is important. What is most important for small businesses is to make sure that they have business income within their property coverage. Business income coverage would continue to pay your lost income and key employees while your covered business is down.
[2:16] Transit disruptions, power failures, and storms affecting suppliers and vendors can have a trickle-down effect on small businesses that can cause them to close their doors. Consider contingent business interruption, a sister coverage to business interruption coverage.
[3:16] Part of your disaster recovery plan needs to identify those key suppliers. Are there other suppliers you could use in the meantime to keep you in business? If not, it would be very important to have this contingent business interruption coverage to bridge the gap until they are back up and running.
[3:41] How can a business prepare their staff for a hurricane about to hit? When the plan is in place, the plan needs to be communicated to all the employees and all the employees need to be aware of how this plan is going to play out. It would be very beneficial to have a tabletop drill of the plan so that everyone is familiar with it.
[4:24] Someone needs to have the role of maintaining contact information post-storm, because all of your employees are going to evacuate and be spread out. If there is a way to monitor that and communicate with those employees, that is very important.
[4:43] What are some of the steps companies need to take during the storm? The first concern is safety. If you don’t evacuate, you need to make sure you have safety, food, water, and a way to communicate with others that have evacuated so you can protect your property.
[5:25] If you do evacuate, being able to communicate with local authorities, staff, and other employees, and getting back to your location to assess the damage are all important.
[5:41] During the storm, for safety, turn off all the utilities that you can, stay away from any windows, and take normal safety precautions. If you hunker down, make sure you’re in a safe place and have taken the necessary precautions.
[6:09] In the next episode with Prentice McIntosh, Frank Thomas will discuss with her what businesses need to do following a storm.
[6:14] 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:
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: