Many small businesses do not survive a hurricane. Make sure yours will

Key takeaways:

  • The 2021 hurricane season is expected to have more storms than normal.
  • Many small businesses go under after hurricanes, not just immediately but years afterward.
  • Make a plan for your staff, structures, surroundings, interior space, and systems.
  • Check your insurance policy and consult your agent to be sure you have the right coverage, including business interruption insurance.

Weather forecasters are expecting that the 2021 Atlantic hurricane season will be busier than normal, warning that businesses should take measures to prepare now. Meteorologists are predicting 18 named storms as well as a total of 11 hurricanes, three of them major with a wind speed of more than 115 miles per hour. 

Hurricane preparation should include measures to protect employees and customers, as well as business continuity. Natural disaster impacts to businesses shouldn’t be underestimated. An immediate consequence to a small business is devastating – 40% of them won’t reopen. The following year will see 25% more small businesses close and within three years, 75% of small businesses will shutter without a continuity plan. 

Even if you have a hurricane preparedness plan in place, it’s time to review it – the pandemic has changed everything, including evacuation center procedures and the recent shift to remote working. Let’s talk about what you should consider when reviewing your current plan or developing a new one to keep people safe and your business in operation.

1. Assess your risks

Of course, wind, rain, and flooding are three dangerous components of hurricane season, but physical damage risks are just part of the picture. The U.S. government offers a business self-assessment to help you identify risks that might not be on your radar. You can use this assessment to develop a plan.

These include such things as utilities and equipment necessary to run your business, financial questions including meeting payroll, and setting priorities for recovery operations. 

When it comes to physical damage risks, be sure you know the flood risk to your business’s physical location, and encourage remote employees to do the same. Have a licensed professional assess your roof and other building connections to be sure they meet local codes, and if you have a lot of large windows or glass walls, use an impact-resistant film or replace them with impact-resistant glass.

2. Prepare a plan

When preparing your business for hurricane season, you’ll need to consider your staff, the things that surround your building, its contents, systems, and structure if you want to give your organization the best chance for continuity after the storm passes.

3. Educate your staff

If your employees are working on-premises, purchase a weather radio to monitor what’s happening before a storm and encourage staff to download a mobile alert app. Develop an employee awareness campaign, as well as an evacuation/sheltering procedure, and hold training sessions and drills.

Make sure you have everyone’s phone number and address to communicate quickly, provide evacuation locations if possible for employees working remotely, and give them time to care for their needs, as well as their family. 

4. Check your surroundings

You want to make sure everything surrounding your building is secure and won’t go flying during the storm. This includes signs, trees, landscaping, fences, and even flagpoles. Consult a professional if needed to make sure your fencing is secure, that signs will withstand the wind pressure, and that your flagpole can stand up to the hurricane or needs to be removed. 

5. Examine your interior space

If you work with chemicals of any kind, be sure they are in a safe place where containers won’t be damaged and leak or float off in a flood. 

For everything else, it’s recommended that you store anything critical one foot above the base flood elevation or the design flood elevation, whatever is higher. The base flood elevation is a baseline determined by the government and is based on a 1% chance that a structure will flood in any given year, or once in 100 years. The design flood elevation is the base flood elevation plus an additional two feet, and this is usually done as a retrofit. 

6. Evaluate your systems

It’s important to ensure that every system and connection in your building is designed to resist the predicted wind speeds as well as uplift. Bring in professionals in each area who can inspect and develop solutions to protect your essential systems.

These systems include mechanical, electrical, communications, lighting (including safety lighting), utility connections, any structures on the roof, water systems, sewer systems, and if your building has them, any fuel tanks and their associated items.

Another business essential is your data. Make sure all computers are backed up and your data stored off-premise or in the cloud.

7. Inspect your structure

Some items, such as a roof inspection, are obvious but have you thought about things like your foundation and load path? What about soffits and gable-ends? 

Have a professional engineer inspect your roof and make changes as needed. You want to make sure it can withstand wind, water, and uplift. You should also make sure gable ends are braced and soffits supported. A foundation inspection may mean you need to retrofit to prevent flooding.

8. Perform an insurance review

Your insurance agent can provide valuable guidance, not only for what insurance you need to protect your business but in preparation steps. After all, they’ve seen this all before and know the pitfalls and consequences of improper preparation.

A standard business policy will cover your losses from wind if windows are broken or roofs are damaged, for example, as well as any rain that falls into the building. Be sure to check to see if you have a separate wind deductible. 

However, if water enters the building due to a flood, you’ll need a separate flood insurance policy to get the damage covered.

Also, you should have business interruption insurance, a policy endorsement that covers losses your company suffers after an event. This means you will be compensated for the income you would have earned if you hadn’t had to temporarily close your business.

Check with your agent if business interruption insurance also covers mortgage payments, lease payments, utilities, temporary relocation, and the salaries of your key employees. 

When it comes to hurricanes, every business should follow the Boy Scout motto: “Be prepared.”

Don’t let a hurricane blow away your business

When a hurricane is on the horizon, it’s too late to make sure you’re covered, so make sure your insurance is up to snuff. 

At Avante, we’ll discuss your business and build the complete coverage you need. Reach out today to make sure your business can weather any storm. 

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.