By: Frank Russo, Managing Director, Imperium Consulting Group
Atlantic hurricane season is here, along with the necessity for business protection and hurricane risk management and planning. The increasing financial toll of natural disasters and operational disruptions over the past two decades continues to evolve, showing no signs of tempering.
According to statistics from the NOAA National Weather Service, forecasters at the Climate Prediction Center anticipate a higher-than-average hurricane activity in the Atlantic basin this year. NOAA's 2024 Atlantic hurricane season outlook, covering June 1 to November 30, projects an 85% likelihood of an above-normal season, a 10% chance of a near-normal season, and a 5% chance of a below-normal season.
The forecast predicts between 17 and 25 named storms (with winds of 39 mph or higher), of which 8 to 13 could develop into hurricanes (with winds of 74 mph or higher). Additionally, it is expected that 4 to 7 of these hurricanes could become major hurricanes (category 3, 4, or 5, with winds of 111 mph or higher). Forecasters have a 70% confidence level in these projections.
These sobering statistics should compel urgent action within your organization to prioritize proactive hurricane risk management. If you've been fortunate to make it through past hurricane seasons unscathed, don't rest on your laurels. As a notable quote from Benjamin Franklin goes: "By failing to prepare, you are preparing to fail."
It's Not Too Late for Proactive Hurricane Risk Management
Now is the time to review, refresh and adjust existing business continuity plans; get your team informed to be on the ready; have discussions with your key insurance brokers; touch base with your external disaster response advisors; and talk to your insurance claims experts who are constantly dealing with losses to learn what's new and how changing conditions with insurance and FEMA reimbursement may affect a potential loss recovery for your organization. It’s not too late. By employing a ready-for-anything organizational mindset, businesses can effectively shield their interests, curtail potential losses and hasten the insurance claims financial recovery process.
These pre- and post-loss tips can help your organization refresh your hurricane risk planning:
Hurricane Risk Management - Pre-Loss Prep:
- Strategically review or devise an emergency plan tailored for your business, delineating clear roles and responsibilities for immediate action post-loss.
- Establish and regularly practice robust communication protocols to ensure all employees are versed in emergency procedures.
- Strengthen structures, secure unfastened objects and consider incorporating hurricane shutters or impact-resistant windows.
- Shield essential equipment and data from probable damages.
- Execute more frequent data backups to off-site or cloud storage. Establish remote work provisions to maintain business continuity in the event of evacuations or closures.
- Liaise with your insurance broker or advisor to fully understand your comprehensive coverage against possible hurricane-induced threats, including limits, sublimits, deductibles and potential exclusions.
- Assemble and ready your loss recovery team, including as appropriate: operations and accounting colleagues, brokers, claims advocates and forensic accountants/claim preparation consultants.
Hurricane Risk Management - Immediate Steps Post-Hurricane:
- First and foremost, confirm the safety of reentering your business facilities.
- Activate loss recovery team.
- Act swiftly to prevent further damage, such as boarding up broken windows or covering damaged roofs.
- Survey for structural damage, gas leaks or potential electrical risks.
- Heed all guidance issued by local authorities.
- Document all damages through photos and videos to aid in insurance claims. Use new technologies to enhance this process.
- Construct a comprehensive inventory of damaged assets, including equipment, inventory and infrastructure.
- Retain damaged items as evidence for insurance claims, if feasible.
- Promptly contact your insurance provider to report your loss and initiate the claims process.
- Keep meticulous records of all exchanges with your insurance company.
- Retain all receipts for mitigation efforts as these may be eligible for reimbursement.
For more information about hurricane risk management and planning for hurricane losses, or if you are currently dealing with a disaster and need advice on cost preparation and insurance/FEMA recovery, contact Imperium to speak with one of our hurricane risk management experts.
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