Workers remove debris after Hurricane Maria at the Corporacion Avicola Morovis Inc. facility in Morovis, Puerto Rico, on Monday, Oct. 2, 2017. (Photo: Alex Wroblewski/Bloomberg)
Hurricanes Harvey, Maria and Irma all had substantial effects on the U.S. and Caribbean in 2017 and now rank among the top five costliest on record, according to the National Hurricane Center (NHC). With the National Oceanic and Atmospheric Administration (NOAA) forecasting a similarly active 2018 hurricane season, businesses must take steps now to prepare.
|What we learned in 2017
The sheer number of devastating storms, along with simultaneous earthquakes and wildfires, challenged organizations, their employees, insurers, claims adjusters and consultants, governments, utilities, vendors and suppliers in 2017. Obtaining qualified expertise, equipment, labor, power and fuel proved difficult for many organizations without adequate and tested risk management and business continuity plans. Companies also experienced delays in loss assessments, reporting, claims filing and funds distribution.
Some of the delay was attributable to the varied terms and conditions in insurance policies, which had not been fully vetted prior to sustained losses and were open to interpretation by insureds, insurers, and legal counsel.
If you could be affected by this year's hurricanes, whether you are located in U.S. regions prone to storms or reliant on suppliers and vendors in such regions, you should consider taking the following preparatory steps:
|1. Review your business continuity plans & supply chain network
A storm could affect your operations, your suppliers' operations, and critical infrastructure, including power, telecommunications, roads, airports, railways and seaports. Know the specific locations of your suppliers — and their suppliers — so you can better ensure business continuity. Also consider alternate suppliers and shipping methods to prevent or limit disruptions to your supply chain.
|2. Help your people
If your business is affected by a storm, it's almost certain that your employees and their families will be too. Before a storm, help employees prepare, including getting them to safety. During and after a storm, stay connected with them and be ready to support with humanitarian assistance, including guidance on how they can manage their own insurance claims.
|3. Understand your coverage & claims processes
Every storm will cause its own unique damage and bring with it questions around property policy coverage. Before a storm arrives, make sure you understand key definitions, sub-limits for flooding and other coverage areas and other terms in your policy. And establish a framework and protocols with your insurers for gathering information and filing a claim after the storm passes.
|4. Know your property
From receipts for improvements made over the years to official records or visual documentation, verifying your property's condition before a storm is critical to proper indemnification in the aftermath. Imagery from satellites, drones, and helicopters can give you, underwriters, and adjusters a more complete picture of your property's value and potentially hidden risks. Using aerial technologies during and following a storm can pose additional risks, so tread carefully and call in outside experts as needed.
With another active hurricane season predicted, you should proactively manage your risk preparedness, resilience, and post-event response. Using these guidelines can help your people stay safe and your organization quickly resume normal operations.
Duncan Ellis is a managing director resident in Marsh's New York office and is the leader of Marsh's U.S. Property Practice.
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